Is Facebook Walking into a Minefield in Europe?
Obscene images of children
Facebook (FB) is set to appear before a powerful group of UK (EWU) lawmakers to answer questions ranging from fake news to the publication of obscene images of children on its social network. The issue of the obscene images was added later to the hearing, which was initially scheduled to only discuss the problem of fake news.
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Facebook slammed for slow cleanup
Facebook has recently been slammed for its failure to take down images that violate its own policies. A BBC (British Broadcasting Company) investigation uncovered closed groups on Facebook that are engaged in sharing explicit images of children. The news organization identified 100 images that it deemed illegal to post on the social network and informed Facebook about them. But Facebook only removed 18 of the 100 images and left the rest on the site. Only later did Facebook take down all the controversial images, and lawmakers want to know why.
Facebook generated ~$2.0 billion in revenue in Europe (EFA) in 4Q16. The above graph shows the company’s European revenue trend for the last five quarters.
A tightening business environment in Europe
The BBC investigation could complicate Facebook’s meeting with UK lawmakers and its business in Europe. Facebook, Alphabet’s (GOOGL) Google, and their US (SPY) peers are struggling with tightening consumer privacy laws that could expose them to fines and limit their ability to serve targeted ads to their European audiences.
Facebook has begun to diversify its revenue streams by expanding into fields such as digital payments and hardware and software sales. But online advertising is still its bread and butter.