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Facebook (FB) Restricts the Use of Data for Surveillance

Zacks Equity Research

In order to make the platform safe, Facebook FB said that it has banned developers from “us[ing] data obtained from us to provide tools that are used for surveillance.”

Facebook and Twitter TWTR have been courting controversy ever since it was reported by privacy protection groups like American Civil Liberties Union (ACLU) that the data was being used by law enforcement agencies to “track protestors.”

Per media reports, ACLU had pointed out last year that Facebook and other social media sites like Instagram had been giving data access to Geofeedia, which describes itself as a location-oriented analytics platform that allows prediction, analysis and even take action based on real-time social media conversations. Following this, Facebook and Twitter cut off all access to Geofeedia. Despite the cut off, these companies came under fire from privacy advocates for their complacency regarding usage of their data.

In a blog post, Facebook said that it has taken actions against developers who have violated its policies. In order to restrict incidents like this in the future, Facebook added that it was making the policy “explicit.”

Facebook, Inc. Price

Facebook, Inc. Price | Facebook, Inc. Quote

Facebook further added, “We want to be sure everyone understands the underlying policy and how to comply. We will continue using our policies to support our community, and we hope that these efforts will help encourage other companies to take positive steps as well.”

To curb social media surveillance by government, agencies like ACLU have been working on bringing more awareness. Earlier, a lawyer for ACLU was quoted saying “Posts on social media platforms can reveal information about our location, our religion, the people we associate with. Users of social media websites do not expect or want the government to be monitoring this information. And users should not be at risk of being branded a risk to public safety simply for speaking their mind on social media.”

Facebook has a massive 1.9 billion user base and the data that it collects from them is huge. However, Facebook does have a responsibility to protect the users’ information. Though the steps taken by Facebook are headed in the right direction, we believe Facebook needs to be all the more vigilant as far as data usage is concerned. Slackness on this part can cause loss of users. For social media companies, loss of this key metric does not bode well for long term.

Zacks Rank & Share Price Movement

Facebook carries a Zacks Rank #3 (Hold). In the past one year, Facebook’s shares have registered growth of 26.14% compared with the Zacks Internet Services industry’s gain of 12.27%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Better-ranked stocks in the wider technology space include Tech Data Corp TECD and Leaf Group Ltd LFGR. While Tech Data sports a Zacks Rank#1 (Strong Buy), Leaf Group carries a Zacks Rank #2 (Buy).

In the trailing four quarters, Tech Data and Leaf Group have yielded positive average earnings surprises of 8.73% and 27.94%, respectively.

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