FacebookFB is under pressure for violating a new cyber-security law in Vietnam, per Financial Times (FT).
Vietnam's Authority of Broadcasting and Electronic Information (ABEI) stated the social media giant has delayed the removal of "slanderous content, anti-government sentiment and libel and defamation of individuals, organizations and state agencies."
Facebook also failed to disclose information about fraudulent accounts to state security authorities. Therefore, in connection with the issue, Ministry of Information and Communications is likely to stop some advertising money paid to Facebook, per FT.
Earlier, Facebook has received warning from the Indonesian government and its practices have been criticized by regulators from countries like Argentina, Brazil, Canada, Ireland, Latvia, Singapore, France, Belgium and the U.K.
Notably, Vietnam approved a new cyber security law in June 2018 that came into effect on Jan 1, 2019. The new law requires tech giants like Facebook and Alphabet's GOOGL Google to open local offices and store data in the country. Additionally, companies are required to disclose user data to authorities without a court order.
However, both the tech giants and New York-based Human Rights Watch criticized the country's new law as it infringes users' right to data privacy. Notably, companies like Apple AAPL , Amazon AMZN , Microsoft, Twitter, Facebook and Google provide user data to governments around the world only after it is permitted by an authorized official and under appropriate law.
Facebook, Inc. Revenue (TTM)
Are Facebook's Security Measures Enough to Regain User Confidence?
Mark Zuckerberg noted during third-quarter 2018 earnings release that investments in security will continue to increase in the near term.
The social media giant is trying to curb security breaches and misuse of the platform after being criticized for data privacy issues. Notably, the company expects a 50-55% increase in expenses due to data privacy initiatives.
To further strengthen his security initiative, Zuckerberg recently announced that in 2019 he will be vocal about the role of technology in the well-being of the society. Additionally, Zuckerberg will talk about issues that Facebook itself is trying to solve including how technology can be used for good.
Facebook had earlier removed several pages and accounts that were found spreading misinformation, ahead of elections in Bangladesh, India, Brazil and the United States. Additionally, the company employed a few local moderators to better monitor content on its platform.
Apart from putting together a team of specialists to monitor the content on its platform, Facebook is also closely working with Atlantic Council, Digital Forensic Research Labfor and Election Commission of India. The collaborations are expected to limit the dissemination of fake news and external interference on the platform.
We believe the company's efforts to enhance security will boost user confidence and attract ad dollars, which contribute significantly to the top line (98.6% of third-quarter 2018 revenues).
Facebook currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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