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Facebook sued for allegedly watching Instagram users through camera

Facebook has been sued for allegedly watching Instagram users through their camera. Yahoo Finance's Dan Howley joins the On the Move panel to discuss.

Video Transcript

JULIE HYMAN: Shares of Facebook today off about a half a percent. We're seeing a sell off in technology, probably not reacting to the following news. Facebook is being sued for allegedly spying on Instagram users. The way it allegedly works, according to this suit, is that when you're scrolling through Instagram on your mobile phone specifically that the camera is watching you.

Dan Howley, I guess, how do we know if this is happening? And if so, why would Facebook want to do something like this if it were true?

DAN HOWLEY: So the issue here seems to be, at least as far as Facebook goes-- or tells it, is that this was kind of a bug because of Apple's iOS 14. Now, iOS 14 is sort of a huge deal when it comes to privacy and security. They give you tons of updates on what apps are using what.

And you'd see a little notification in the top right corner showing a, kind of, a green circle or a green dot when your camera's active. And that's kind of what was being used here or shown to be being used. Facebook says that it was a bug and it was patched and taken down. And, you know, it kind of feeds into that narrative that Facebook constantly is watching you or your phone is constantly watching you or there's a little FBI man inside your phone that's watching you.

I don't think this was purposeful. It would be incredible for Facebook to do something like this. I mean, you know, like, company destroying levels of incredible, beyond Cambridge Analytica, if they were actually doing something like this. So I think that it really must have just been a bug.

ADAM SHAPIRO: It must have been a bug. But I got to tell you, Dan, you just brought up the new security features with iOS 14. And I downloaded it, I'm amazed. It's really remarkable that orange light for when your microphone is on and that green light when it's on. But in regards to Facebook, why would it be so remarkable?

They continually tell us one thing and then they wind up doing something else. I mean, Mark Zuckerberg is-- it's almost like he's Dr. Evil, no joke.

DAN HOWLEY: Yeah, I mean, it really is kind of to a degree where, you know, this is something that you wouldn't normally think should happen or would happen. But because of Facebook's history with its inability to keep people's data safe, using biometrics to scan people's faces, using the photos that you uploaded, that friends upload of you, having secondary profiles for people who don't even have profiles, it really does make it seem like this could be true.

But, you know, I kind of want to err on the side of giving them the benefit of the doubt, even though it's Facebook and that this would be such an absurd breach of consumer public trust. I mean, you would have to think that this is got to be a bug.

JULIE HYMAN: So Dan, at the same time that Facebook is sort of battling external challenges like this, it is also trying to deal with internal challenges. Mark Zuckerberg has said that the company is moving to curb internal debate around divisive political and social topics because there have been, I guess, arguments among staffers about all of this. Sibile, when we look at corporate America in what is a very highly charged political time, you know, it's interesting that Facebook has taken this move.

I just wonder how different companies are handling this and whether this is of a piece with that or different.

SIBILE MARCELLUS: Well, what's really interesting here is that Mark Zuckerberg is the one who wants this. He wants to kind of quell some of those internal discussions when it comes to social issues and policy. But yet, he is the one who's willing to go in front of lawmakers and in front of the press and talk about how Facebook is so critical and needs to have these kinds of discussions and is facilitating these kinds of discussions every time Facebook is criticized for not, you know, stopping hate on its platform.

So Mark Zuckerberg here is walking a fine line. He would actually benefit from having his own employees have these discussions internally so that he wouldn't be so surprised when there is criticism coming from lawmakers or the press or consumers. He needs to be aware of how his platform deals with these kinds of important conversations.

He can't both criticize it and benefit it-- benefit from it at the same time. He would benefit from listening to these internal employees. They know this product the best.

DAN HOWLEY: Yet, it's interesting, Sibile, because a lot of these employees are having serious conversations within their internal discussion boards about the company. Some people saying that they feel like they're hurting democracy or hurting people in the world, you know, because of the products that they produce. And don't forget, you know, we talk about the Russian interference and the divisive nature of Facebook in the US, but Facebook has been used to exact genocide in different parts of the world, right?

We talked about that for a while in Myanmar, where people were using Facebook there to incite rioting and to incite groups to participate in different types of military actions. So, you know, it's not as though Facebook is clean and clear. But yeah, it really is something where Zuckerberg wants to act like, you know, there's an open discussion out in the greater world, but then when it comes to internally, he wants to put the clamps on it.