Whistleblower documents paint stark picture of years\u002Dlong decline in growth for key user groups on flagship Facebook app
The report is among hundreds of internal documents collected by former Facebook employee-turned-whistleblower Frances Haugen, who went public in early October with accusations that Facebook has been prioritizing profits over user safety and security. The documents were disclosed to the U.S. Securities and Exchange Commission and provided to Congress in redacted form by Haugen’s legal counsel. The redacted versions were obtained by a consortium of news organizations, including Bloomberg News.
That discrepancy is the foundation of a formal whistleblower complaint filed by Haugen with the SEC. Among Haugen’s arguments is that Facebook “has misrepresented core metrics to investors and advertisers” for years by showing overall growth but excluding details that show slowdowns in key demographics, according to the letter outlining her complaint.
All of these variables, from declining user engagement to duplicate accounts, suggest that Facebook hasn’t been transparent with investors and advertising clients about its core business, Haugen alleges. She says the documents she gave to the SEC and Congress prove it.“Our products are still widely used by teens, but we face tough competition from the likes of Snapchat and TikTok,” said Joe Osborne, a Facebook spokesperson. “All social media companies want teens to use their services.
That information could impact Facebook’s advertising appeal, Haugen said in her letter to regulators. “Facebook’s stock valuation is based almost entirely on predictions of future advertising growth,” the letter to the SEC reads.Federal securities laws require that companies be truthful when making statements to shareholders, and Facebook has already been accused of violating those demands in recent years.
Facebook acknowledged a teen retention issue on an earnings call in 2013, according to a review of transcripts by Bloomberg. In October of that year, then-Chief Financial Officer David Ebersman said the company had noticed a decline in usage among “younger teens.”
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