Chess board activity

Unethical practices by Facebook and its counters

The presentation revolved around 3 unethical practices carried out by Facebook and how the
government and regulators in vain tried to counter the actions of Facebook.

1. Exploitation of moderators

Manas shed light on the issue faced by thousands of moderators who work a full-time job to
review content flagged by users or artificial intelligence systems to see if it violates the
platform's community standards, and to remove it if necessary.
These posts can often contain graphic violence, suicide, exploitation and abuse. Exposure to such
content for upto 8 hours on a daily basis had adverse effects on the mental health of these
individuals and on top of that, they were not allowed to talk about their trauma with their friends
and family because of a Non-disclosure Agreement they had signed with their employer.

Manas putting up initial point about Facebook.

Ritwik countered Manas’s point by explaining that Facebook has agreed to pay $52m (£42m) to
content moderators as compensation for mental health issues developed on the job.
The agreement settles a class-action lawsuit brought by the moderators, as first reported.
Facebook said it is using both humans and artificial intelligence (AI) to detect posts that violate
policies.
The social media giant has increased its use of AI to remove harmful content during the
coronavirus lockdown.
Facebook also assured to have weekly and monthly mental health and therapy sessions for the
moderators who suffered Post Traumatic Stress Disorder (PTSD)

Ritwik explaining the point.

2. Tax evasion

Anuj talked about how Facebook deploys specific tax evasion methods to avoid paying millions
of dollars. One of the methods is creating shell companies and reporting revenues in these
different companies. For example, Facebook paid:

● In 2011, £2.9m tax on £840m profits in the UK;

 ● In 2012 and 2013 no tax in the UK;
● In 2014 £4,327 tax on hundreds of millions of pounds in UK revenues that were
transferred to tax havens.

Between 2010 and 2015, Facebook generated pre-tax profits in the United States of $14.8 billion,
on which it paid taxes of 16.5 percent or less than half the official corporate tax rate in the United
States. Furthermore, Facebook made no tax payments to the US Treasury for three years.

Aniket discussed about how Facebook unethically avoided taxes through legal loop holes which
led to industrial as well as social well fare loss-Eduardo Saverin, a co-founder of Facebook, has
responded three days after he was criticised by the media for allegedly evading taxes on the
company's IPO by leaving the country. He said to Forbes:

Aniket’s elucidation along with Vignesh and Aditya.

"My decision to expatriate was based solely on my interest in working and living in Singapore,
where I have been since 2009... I am obligated to and will pay hundreds of millions of dollars in
taxes to the United States government. I have paid and will continue to pay any taxes due on
everything I earned while a U.S. citizen."

Saverin is essentially stating that he will not pay nearly as much in taxes on the Facebook IPO,
but rather because he has lived in Singapore rather than the US. According to a spokeswoman,
Saverin opted to relinquish his US citizenship a year ago while residing in Singapore, which
doesn't charge a capital gains tax. Many believed that Saverin's departure must have been related
to Facebook's impending IPO because it was only recently made public. Saverin has only now
addressed the allegations and attested to the living arrangement his spokeswoman described.

The "stock option loophole" is one tax loophole that Facebook has been in the forefront of using.
Stock options are a common form of executive compensation at Facebook and other large firms
(options to purchase shares of company stock at a discounted rate). Even though the company
doesn't have to spend anything to give the stock option to its executives, the company is still
permitted to deduct from its taxable income the difference between the value of the shares and
what the employee pays for the stock when those options are exercised.

3. Data Privacy

Aditya and Aniket Analysed about The current privacy dilemma at Facebook is just one of
several that the firm has faced in its very brief history. The firm, which was barely two years old
in 2006, experienced user backlash when it unveiled its News Feed. It was forced to issue an
apology a year later for disclosing what people's friends had purchased. Years later, the Federal
Trade Commission intervened; it is currently reevaluating the business. Facebook has a history
of upsetting authorities, dealing with user resentment, and making record profits while adding
more than 2 billion members.

● November/December 2007- Beacon, Facebook's first significant run-in with privacy-

related advertising. Companies used to be able to track the purchases made by Facebook
users and then notify their Facebook friends of the purchases, frequently without the
users' consent.Facebook's response: Zuckerberg offers users the chance to opt out and
apologizes.

● June 2013- Facebook bug exposes private contact info. A flaw allowed anyone with a
connection to the user or knowledge of at least one piece of their contact information to
access the email addresses and phone numbers of 6 million Facebook members. A White
Hat hacker—someone who engages in hacking with the goal of assisting businesses in
finding defects and developing better security procedures—found the bug. Facebook
explained that it will compare users' contact lists with other Facebook users to generate
friend suggestions when they signed up for the service and uploaded their contact lists.
Facebook’s response: Facebook fixes bug, notifies people whose info may have been
exposed.
Aditya explaining his point while Ritwik and Vignesh discussing the conclusion.

● March 2018- Disclosed that Facebook was aware of widespread data theft but took no
action, On Wednesday, the Facebook CEO and co-founder finally responded to the query
"Where's Zuck?" by speaking out about the data collection claims. Zuckerberg avoided
using the word "sorry" in a statement that was published on his Facebook wall, but he did
admit that Facebook was partially to blame for the lack of privacy protections that were
put in place. Accountability is one important value that many will be checking to see if
Facebook upholds.
Facebook's response: a tour of apologies and policy modifications

4. Copying and Acquiring its Competitors

Vigneswaran talked about how within the world of business, it is a common practice to recognise
popular innovations and adapt them into your own business model.
But there exists a line between adapting and copying.

It has been observed that Facebook, as a company has always indulged in malpractices and
borderline illegal behaviour.
Facebook has been accused of copying various other apps and softwares like reels from tiktok,
profile section from Google+, 'On this day' feature which shows you your photos from the same
day, some years ago from a company called Timehop. Facebook's revenue generating
marketplace is also a copy of Gumtree.

When copying doesn't work, Facebook sets out acquiring a stake in its competitors or sometimes
the entire company itself. Facebook bought Instagram and WhatsApp for Billions of dollars. It
also tried to acquire Snapchat, but that deal didn't work through in the end.

So, in order to get back at Snapchat, Facebook copied Snapchat's best feature - Stories and
implemented it on its own app - Instagram. Instagram's former CEO Kevin Systrom had himself
admitted, in public, that Snapchat deserves all the credit for popularizing the feature.

It can thus be said that Facebook's success is built on copying it's competitors.

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By-

17030122138- anuj

17030122155- manas

17030122167- aditya

17030122176- ritwik

17030122191- aniket

17030122194- vignesh