Finally, an Accusation of Fraud

Facebook whistle-blower Frances Haugen has stated something that should be obvious to anyone who makes a cursory study of Zuckerberg's monster, that the company has been profiting through fraud.

I've noted this many times, see here, here, here here, here, here, here, and here.

How about frog marching Zuckerberg and Sandberg out of Facebook's offices in handcuffs?

Companies are often slow to react to public opprobrium. Travis Kalanick did not step down as chief executive of Uber until four months after a whistleblower exposed the company’s workplace sexism. Tony Hayward did not resign as boss of BP until three months after the Deepwater Horizon oil spill. The fallout from Facebook’s latest public shaming will not be instantaneous — and may pivot on user statistics as much as hate speech.

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But there is one complaint that should give investors pause. Haugen has written to the Securities and Exchange Commission to claim Facebook “misled investors and advertisers” about the accuracy of its user base count. This is the foundation of a business that accounts for 98 per cent of Facebook revenues.

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She is right that Facebook should stop promoting user numbers clouded by doubts. Facebook’s own estimates suggest 16 per cent of accounts may be duplicates or false. This figure creates a huge discrepancy. Yet Facebook does not adjust important metrics such as average revenue per user (Arpu).

Arpu is a crucial number in social media. For Facebook, the figure was $10.12 in the last quarter.

There are further discrepancies. While Facebook includes all sources of revenue, it limits users to Facebook and Messenger. Last year, it created a figure for its “family” of apps, including WhatsApp and Instagram. Using this, Arpu in the last quarter was very different at $8.36.

If an aggressive criminal investigation of Facebook were conducted there would be a lot of people in the dock.

If it were expanded to online advertising in general, they would have to rent out the hangar holding the Spruce Goose for the arraignments.