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EXPLAINED: Whistleblower Revelations, Massive Outage And A $6BN Slide In Zuckerberg's Fortune

Facebook founder and CEO Mark Zuckerberg apologised to users over the outage

Facebook founder and CEO Mark Zuckerberg apologised to users over the outage

The massive outage came even as the social media giant faces renewed scrutiny over its practices in the wake of a leak of internal documents by a whistleblower

The glitch that hit Facebook properties, including WhatsApp and Instagram, on Monday is being described as the biggest knockout suffered by any online service ever. While it potentially lost the company millions of dollars in revenues, it won’t be the biggest headache facing Facebook honchos this week, given that a whistleblower is set to testify before the US Congress on allegedly questionable policy practices at the social media giant. Amid the double whammy that hit his company, Mark Zuckerberg also lost billions in personal wealth as Facebook shares clocked a dip.

How Bad Is The Drop In Facebook Stock?

Shares of Facebook witnessed a selloff that brought its stock value down 4.9 per cent on October 4, following a damaging series run by the Wall Street Journal (WSJ) based on revelations by a whistleblower who leaked a big cache of the company’s internal documents that raise questions about its stated commitment to prevent misuse of its platforms.

Facebook stock has now seen a drop of about 15 per cent since mid-September, when WSJ started publishing its stories. The fall in stock value also meant that Zuckerberg began October about $6 billion poorer. The 37-year-old is now worth about $120 billion and has dropped below Microsoft founder Bill Gates to No.5 on the Bloomberg Billionaires Index. Reports say that his fortune has experienced a slide from almost $140 billion in a matter of weeks.


The company again finds itself under the spotlight after a former product manager, Frances Haugen, shared with regulators and WSJ thousands of pages of internal documents that detail how Facebook chose not to act despite being aware of extensive problems with its products.

Despite all this, a Forbes report says that “Facebook stock has proven surprisingly durable over the past few years of scandals" and have registered “a more than 150 per cent increase in five years".

What Has The Whistleblower Revealed?

Beginning September 13, WSJ started publishing reports as part of a series called “The Facebook Files" that revealed a mismatch between the company’s public averments and how its policies panned out in actual practice.

From special standards for censorship rules for celebrity users and public figures to holding back internal findings vis-a-vis toxic content and how its platform was affecting users, the stories based on internal documents gathered by Haugen have again brought the company’s practices under the lens. Reports said that Haugen is to now take part in a US Congress hearing related to her revelations.

Discussing the documents on US national television, she said that the company was “paying for its profits with our safety". She is said to have also shared the documents with the US Securities and Exchange Commission (SEC) with the aim of securing better regulation of the company’s policies.

She claims that Facebook executives knew about a host of issues related to its products, like how a change in algorithms in 2018 had maximised hate speech while an internal study had found that Instagram was fuelling negative perceptions among teenaged girls about their bodies.

One of the leaked documents reportedly notes that “misinformation, toxicity, and violent content are inordinately prevalent among reshares", with Haugen saying that she has worked at other tech and internet companies like Google and Pinterest, but “it was substantially worse at Facebook".

The report related to Instagram’s impact on teenaged girls has led to a congressional hearing while Facebook is said to have shelved plans to create a version of its Instagram app for children.

The internal documents also suggest that Facebook relaxed its standards on misinformation after the 2020 US presidential elections and ahead of the January 6 riots at the US Capitol.

“The version of Facebook that exists today is tearing our societies apart and causing ethnic violence around the world… Its own research is showing that content that is hateful, that is divisive, that is polarising — it is easier to inspire people to anger than it is to other emotions,” Haugen has said.

Facebook has come out strongly against the claims made by Haugen and the reports on its allegedly questionable practices. On the charge that its platform could have contributed to the January 6 riots, Nick Clegg, Facebook’s vice president of global affairs, said, “I think it gives people comfort to assume that there must be a technological or a technical explanation for the issues of political polarisation in the US".

How Did The Outage Hit Facebook Properties?

The six-hour outage that Facebook suffered on October 4 along with WhatsApp and Instagram — the other big platforms owned by the company — saw CEO Zuckerberg put out a post to apologise to users.

“Sorry for the disruption today — I know how much you rely on our services to stay connected with the people you care about," he said on Facebook.

Though it was not the first outage experienced by the company, it was said to be the largest suffered by Facebook or any other company for that matter. Downdetector, a site that monitors reports of internet outages, said “the Facebook outage continues and has become the largest outage we’ve ever seen on Downdetector with over 10.6 million problem reports from all over the globe". In 2019, Facebook had faced glitches that had taken the site down for several hours.

Forbes said that the outage likely caused a loss of revenue running into millions of dollars, citing figures that “in the latest quarter, it brought in around $330 million a day in sales".

Explaining the latest crash, Santosh Janardhan, Facebook’s VP, Infrastructure, said it was caused by “configuration changes on the backbone routers that coordinate network traffic between our data centres". That, he said, “had a cascading effect on the way our data centres communicate, bringing our services to a halt".

Underlining “a faulty configuration change" as the “root cause" behind the outage, he clarified that the company had “no evidence that user data was compromised as a result of this downtime".

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first published:October 05, 2021, 11:18 IST