Categories Analysis, Markets, Technology

Opinion: Facebook may have delayed and denied. But did it collude?

The last thing Facebook (FB) needed at a moment of crisis like this was an article by an established publisher criticizing its failure at combating fake news, a problem that has dogged the company since the start of the year. A recent elaborate piece on NYT proved to be that nightmare come true for the largest social media company.

The piece, written based on interviews with numerous past and present employees of Facebook, lambasts the management – particularly COO Sheryl Sandberg – for underemphasizing the crisis at Facebook till it was too late and obvious. It also criticizes the COO for trying to deflect public opinion by falsely placing the blame on its rivals.

A day later, Sandberg came down heavily on the piece, denying allegations that she ignored the extent of Russian interference in the US presidential election in 2016.

sheryl sandberg on facebook crisis
Photo: Wikimedia Commons/ Jolanda Flubacher

She said in a Facebook post, “Mark and I have said many times we were too slow. But to suggest that we weren’t interested in knowing the truth, or we wanted to hide what we knew, or that we tried to prevent investigations, is simply untrue. This was an investigation of a foreign actor trying to interfere in our election. Nothing could be more important to me or to Facebook.”

Though the damage has already been done, it must be noted that the problems faced by Facebook are a first of its kind. Never in the past has the world been more connected, and few would have imagined the drastic consequences of such a technological landscape. The management was apparently blinded by the astounding success of the company, little expecting a foreign interference of this magnitude.

Nobody is justifying the actions of the management here, let’s get that straight. But in the luxury of hindsight, it is easy to pick faults on what has not been done.

Another reason for the delayed response was a management flaw that has led to the downfall of numerous big firms. Indirect information. Following the death of her husband a few months back, Sandberg had delegated the work to other executives. Her decisions during the initial stages of the crisis were heavily influenced by the balance of reports that reached her.

Facebook says UK data was not shared; appeals fine in Cambridge Analytica case

Once the crisis was out in the open, it was more than just a privacy issue, rather it was a political one. Any crisis management measures were expected to have political implications, given that she was a vocal supporter of Hillary Clinton during the presidential election. There had to be a careful assessment before any action was to be taken.

Sandberg, in her Facebook post, also dismissed claims that the company, in association with PR firm Definers Public Affairs, authored and disseminated fake news to deflect all the negative attention it was garnering to rival companies including Apple (AAPL) and Google (GOOGL). It may be noted that the allegations remain credited sans any evidence.

At the end of the day, there were numerous deep-rooted lapses from Zuckerberg and Sandberg in handling the Russian interference crisis, but should they be branded conspirators? That’s hardly the case.

Facebook’s crisis continues to hurt its stock

The social media giant is badly in need for an independent board and better management. Sandberg is already correcting her mistakes by replacing her panel of advisors and setting up an independent team for faster crisis management.

However, Zuckerberg holding a 60% voting right makes an independent board a difficult proposition. The CEO might need to relinquish some power in order to steady the ship this time.

 

DISCLAIMER: The article does not necessarily imply the views of AlphaStreet, and contains opinions of the author alone. 

 

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