Facebook Remains in Top 10 Global 500 Report Despite Criticism Over Data Handling
Over the past four years, Facebook has encountered a series of controversies that hounded its reputation as a very popular social media platform, particularly after investigations into the Cambridge Analytica data scandal. Facebook has been criticized over how it handles its users’ personal data, how it regulates featured content, and how hackers were able to gain access.
Despite these brand challenges, Facebook’s value continues to increase, and its source of income continues to grow.
Facebook’s brand strength index (BSI) as reported in the Brand Finance’s Global 500 report dropped to 11% in 2018 due to lowered consumer trust ratings. To make matters worse, CEO and Chairman, Mark Zuckerberg has received flack over how he handled these controversies.
Responding to these controversies and to allay users’ unease, the tech giant updated their terms of service to explain how Facebook responds to content that violates its terms, how it makes money, and how it treats users’ intellectual property.
In the face of negative PR, Facebook still manages to remain in the top ten rankings of both Global 500 and US 500 reports and even steps up to fifth in the Tech 100 report.
Facebook has made efforts to recover lost reputation by recently launching its first ever brand advertising campaign to highlight Facebook’s role as a community builder using the tagline “more together.” It has been estimated to cost Facebook $382 million on ads in 2018 towards reputation repair.
Facebook has a total portfolio of about 7,700 registered trade marks that started with the filing of its first trade mark ‘FACE’ in the EU in 2004. WhatsApp, one of the world’s most popular messaging applications is now part of the Facebook family of companies after it was acquired by Facebook in February 2014.
Facebook continues to face challenges. According to some studies, millennials are “more into” using Snapchat and Instagram although still big fans of Facebook. Good thing Facebook bought Instagram in 2012 because Instagram has a brand value of $16.7 billion and has over 1.5 billion monthly active users!
Despite criticism, Facebook’ success is demonstrated by its ad revenues reaching record levels in 2018 with a 9% increase in active users to 1.52 billion and revenue tops of $16.6 billion for the final quarter of 2018.
In the meantime, the US Federal Trade Commission has approved a $US 5 billion settlement with Facebook in the aftermath of inappropriate data sharing with Cambridge Analytica. The settlement would be the largest civil penalty paid to the agency. Critics say the fine will hardly make a difference to Facebook’s bank account. Investors reacted to news of the massive fine pushing Facebook shares up 1.8 percent! As part of the settlement, Facebook had to agree to a new management structure and new rules about how it manages user data.
Svethlana Milanes, ABComm
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Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.