NYT Investigation Not Making Things Easier for Facebook

Mark Zuckerberg is on track to lose $15 billion this year, and articles like this from the New York Times give more than an inkling as to why: An investigation based on hundreds of pages of internal documents show Facebook has for years given a select group of 150+ partners—ranging from Apple to Pandora to Rotten Tomatoes to Yahoo—primo access to user data that it essentially shouldn't have access to. Facebook says the partnerships didn't run afoul of its user privacy rules or the FTC's 2011 consent agreement, which requires it secure user permission before sharing data (more on that below). As for the "why," a companion Times piece—which asserts these partners managed to get more than Cambridge Analytica did—says that in handing over data to partners, those partners were able to use the data in ways that helped Facebook attract new users, get users to increase their usage of the site, and boost ad revenue.

Some deals date to 2010 and all were active through 2017, with some still in effect this year. One example of the access granted, per the Times: Facebook allowed companies like Amazon and Microsoft to access a user's email address via that user's friends. Here's a more explosive one:

• "Facebook also allowed Spotify, Netflix and the Royal Bank of Canada to read, write and delete users' private messages, and to see all participants on a thread—privileges that appeared to go beyond what the companies needed to integrate Facebook into their systems, the records show."

Most of the partners the Times spoke with brushed off the idea of wrongdoing: some said they weren't aware they still had access to the data; others said they had deleted it; others said they never had such special access to begin with. Facebook says it isn't in violation of the FTC agreement because many of the deals fall under the service provider exception. Facebook says it views those partners as service providers who essentially function as "extensions of itself" and use the data in ways that enable users to interact with their Facebook friends. Investors aren't calmed by that explanation: Bloomberg reports Facebook shares were down in pre-market trading. Read the full investigation here. (A big-name tech journalist has just quit Facebook.)