Is This Tiny App Developer Capable of Taking Down Facebook?

News from the UK revealed that the app developer Six4Three, a U.S. based company, was mandated to disclose sensitive court documents having to do with their lawsuit against Facebook (NASDAQ: FB) to members of British Parliament. Should they have attempted to fight the request, heavy fines and potential prison time were possibilities.

Facebook is insisting that these documents be returned promptly. However, because they contain new information regarding the years prior to the Cambridge Analytica incident, the documents will prove to be invaluable in future legal proceedings. In addition, the documents disclose Facebook’s farming out of user data for profit.

A Bloomberg article reported earlier in the year that Six4Three — whose disturbing app “Pikinis” allowed its members to scan thousands of Facebook profiles for bikini pictures — is in the process of suing Facebook due to supposed ‘bait-and-switch’ methodology. Six4Three claims that Facebook promised them unlimited user data one minute and then, when the huge privacy policy movement in 2013 initiated, all that info went away.

In a bizarre twist, this tiny company that had a cumulative $400 in sales for its extremely creepy app is poised to shave millions off the Facebook share price. Despite their efforts to minimize the damage, it will still prove to be a significant kick in the teeth to both Facebook and Mark Zuckerberg who must continue his efforts to control the damage.

Cambridge Analytica’s Part in this Whole Mess and How it Affects User Growth

It seems like it’s been ages since the Cambridge Analytica incident. For those of you who don’t remember, Cambridge Analytica is essentially a market research company that harvested 50 Million Facebook profiles. That information, in turn, was used to predict and influence voter decisions. In the wake of that disaster, Facebook is still trying to regain the credibility it once had. Due to that series of events, Facebook had its first Death Cross — a technical indicator indicating an unusually aggressive downward turn in the market exceeding the long-term moving average — and was devastating for user growth in Q2.

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The data-mining company Cambridge Analytica was granted permission from Facebook to create a seemingly innocent quiz. This quiz mined not just the data of the quiz taker, but also all their friends' information as well. This led to over 80 Million users with compromised information that was used to develop psychographic profiles which led to targeted advertising.

Due to Cambridge Analytica’s Trump connection (Steve Bannon was the founding VP and Robert Mercer was an investor) Democrats lost their collective minds, backing Facebook between a rock and a hard place as far as trust from both parties was involved.

In the meantime, it is the popular belief that Brexit was able to take place due to Cambridge Analytica’s meddling. Meddling and Russians.

Facebook Has to Win Back our Trust if it Hopes to Ever Recover it’s Flagging User Growth

It will take significant goodwill, time and hard work on the part of Facebook, but there is hope that they will eventually regain the trust of its members.

Investors may not like what the disclosed court documents reveal, but it’s not like the news will really be that new. It’s practically common knowledge at this point that Facebook has provided advertisers with unfettered access to user profiles for the purpose of creating targeted ads.

It is extremely unlikely, when all is said and done, that a bikini-creeping app will be what ends up taking out Facebook. It’s just one in a long line of scandals for the social media titan and is unlikely to be the last. User growth is their real problem at the moment and if they can manage to regain our trust, they may see better numbers in the near future.

The only question is, how long will it take Mark Zuckerberg to achieve that level of trust. One thing’s for sure, he’s going to have to kiss a lot of metaphorical babies before I’ll trust him with my information.


Bill Poulos is a financial educator who began studying the stock markets in the early 1970s. Today, Poulos is the President and cofounder of Profits Run, Inc. Bill shares his knowledge on investments and wealth-growing ideas through Profits Run’s programs. Profits Run reviews how to invest with more knowledge while minimizing risks with courses, seminars, software, coaching, and publications. Profits Run and Bill Poulos are passionate about giving back to their community. Bill lives in Wixom, Michigan with his wife of 48 years, Karen. Bill and Karen have 3 sons and 2 grandchildren.

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