Facebook Inc. (NASDAQ: FB), beset by problems that include the alleged release of private member data, will be hit with more investigations and possible sanctions and regulation by both the U.S. government and others overseas. The trouble will lead to the desertion of advertisers and users, which would hit the company financially. The most recent accusations come from a New York Times article that claims Facebook released private member data to other large tech companies.
Founder Mark Zuckerberg controls the voting shares of Facebook, so it is nearly impossible to force him out. That leaves his number two, Sheryl Sandberg, who is both the chief operating officer and a member of the board of directors.
Sandberg already has been to Congress to defend the company’s business practices. She said Facebook did not have the means to police all the “bad actors” who might use the social network to deceive users. She also has been accused of approving investigations of billionaire George Soros, who had criticized Facebook and its practices.
The latest charges suggest that cooperation between Facebook and other large tech companies, including Yahoo and Amazon, in the use of private member information went on for years, according to the New York Times investigation. It is almost impossible to imagine Facebook executives could have done this without the knowledge of Sandberg or Zuckerberg.
Sandberg has been chief operating officer of Facebook since 2008, which means she has overseen its growth into a tech behemoth. For that, she gets a great deal of the credit. But if the accusations about Facebook’s potentially illegal activity reach close to Zuckerberg, he has only one place to turn if he wants to blame someone for the decisions that will make the company a pariah with members and advertisers, as well as a target of the government.
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