The EU is closely watching American technology companies such as Google, Apple and Facebook. In one case, Google and the French Treasury reached a $1 billion tax settlement agreement.
Editor’s note: This article is from WeChat public account “American Stock Research Institute” (ID: meigushe), the author of the US stock research institute.
The EU is closely watching American technology companies such as Google, Apple and Facebook. In one case, Google and the French Treasury reached a $1 billion tax settlement agreement.
Three US technology giants face EU review
In addition, Apple is facing litigation in Europe. The iPhone maker received a $13 billion fine notice in 2016. The current lawsuit against Apple has risen to $14 billion, including paying taxes. In addition, Facebook, a social media site, has also received attention for infringing on user privacy.
Another thing that these three companies have in common is that their European headquarters are in Ireland. EU Competition Commissioner Margaret Vestag believes that Ireland’s lower tax rate does not bode well for competition among other European countries.
How do these conditions affect the outcome of Q3?
Facebook is facing cases of managing inappropriate user data and violating data privacy practices. This includes an example of privacy violations. With the announcement of third-quarter results, investors should understand the facts behind the case. After all, these factors may change the overall valuation of Facebook stock.
Facebook’s revenue comes mainly from advertisers. As a result, more and more page views have increased advertising revenue. However, for such a business model, litigation that violates privacy practices can be catastrophic. If users are concerned about data breaches, advertising revenue and company reputation may plummet.
Violation of data regulations and fines can be a disaster for income
In April 2018, a survey was conducted at the Pohnmon Institute, a Michigan-based research facility. According to the Ponemon Institute, consumer trust in Facebook has fallen by 65%. In addition, ongoing reputational risks mayFB projects that affect the future, such as Libra. After all, how can people trust Facebook with digital currency when personal data is not secure?
Loss of income is not the only concern. Data violations are also subject to significant penalties. In July 2019, after the Federal Trade Commission investigation, FB was fined $5 billion. Such a large fine may reduce quarterly earnings. In addition, it may also have a spillover effect on annual net income.
Facebook in Austria
In 2016, the Austrian Green Party member Eva glawischnigi – piesczek protested Facebook users’ illegal comments against her. Glawischnig said the company has a responsibility to curb hate speech on social media. Later, the regulator instructed Facebook to delete these posts. However, the court dismissed the request of Grauhuani-Piesk to delete other similar hate posts on Facebook. The court rejected the request on the grounds of a violation of the e-commerce directive.
In addition, the Polish non-profit organization also filed a lawsuit against Facebook. SIN also made a similar request for the right to freedom of expression. SIN promoted the anti-drug campaign on its Facebook page. Facebook blocked the organization on its website. Account. The criminal account was activated after the event was exposed. The final verdict on this matter is still waiting.
Facebook in Germany
However, on another completely different matter, the German Federal Ministry of Justice imposed a $2 million fine on Facebook. The case belongs to the Network Enforcement Law. Facebook must send an office transparency report on illegal content complaints every six months. The German Ministry of Justice said that Facebook has been underreporting the number of complaints.
Facebook situation
In July 2019, Facebook was also fined $5 billion by the US Federal Trade Commission. The Federal Trade Commission fined Facebook for infringing on user privacy. This is the second ticket issued by the US Federal Trade Commission to Facebook. In 2012, the company was fined for the first time for similar acts.
The $5 billion settlement agreement is an out-of-court agreement. If you file a lawsuit, this may be a major disaster for Facebook’s financial stocks. The survey was based on Facebook’s earlier statement that users could control their privacy settings. However, mobile apps can exclude these settings. In addition, other application developers can retrieve user account data.
Conclusion
Most of the Facebook cases occurred in July. These cases may put pressure on third-quarter earnings. Messages about user privacy may undermine trust in Facebook. In addition, it also reduces the amount of time users spend on the app.
The number and variety of litigation against Facebook is shocking. Eva Glawischnig, for example, restricts user freedom of speech, infringes on data privacy, FTC cases, and transfers user data from Europe to the United States. Unfortunately, these things will directly affect advertising revenue in the third quarter. In my opinion, Facebook’s stock may fall gradually before the third quarter results announcement.