back to article Facebook stockholders tell Zuck to reform voting rules as data scandal branded 'human rights violation'

Facebook has been accused of violating users' human rights and failing to create adequate risk management structures in a heated exchange with stockholders yesterday. Angry investors lined up to criticise the company – mired in scandal since the extent of data harvesting on the platform was revealed in April – at its annual …

  1. codejunky Silver badge

    Meh

    "shareholder democracy is already lacking at Facebook"

    Cry me a river. In a market economy if you do not like how the company is acting on your behalf sell your shares. When the shares were bought I expect the situation was the same, so if they dont like the situation they can remove themselves easily.

    In the market your money is your vote, use it. If enough people feel the same way it will impact the capital available to the company. Buying in and then demanding the voting process is unfair doesnt make Zuck look bad, it makes you look bad for choosing to join and then complain.

    1. Anonymous Coward
      Anonymous Coward

      Re: Meh

      Trouble is the market is distorted. The insiders control like 80 or 90% of the voting power in the entire company, and these insiders NEVER get out. Even if every outside shareholder were to unite against the insiders in any way, shape, or form (this includes a mass sellout), it wouldn't put a dent in any unified action against the insiders. Outsider shares are essentially hollow shares that have no real power, not even if sold in protest. The only way Facebook will seriously change is through either insider (not likely) or government (also unlikely) intervention.

      1. codejunky Silver badge

        Re: Meh

        @AC

        That is my point, but followed with a big dollop of so what. The outsiders hold the power to sell their shares if they disagree with the voting system. There shouldnt be any intervention from the gov, this is a private matter internal to FB.

        The outsiders choose to buy FB shares. If they want to put capital into a company they can get more control of they need to sell their shares and buy into another company.

      2. ratfox Silver badge

        Re: Meh

        Well yeah. There's things in life that cannot be bought, such as love, or control of Facebook. That's a fact that outsiders should have known from the start. It makes no sense to complain about it.

        Outsiders shares give no power, but they do give money. Well, theoretically; in practice they don't give dividends, so you only make money from them if you sell them higher than you bought. Luckily, the actions are at a historic high, so if you don't like the voting arrangement you can sell them right now.

      3. tom dial Silver badge

        Re: Meh

        Shareholder issues normally come with a management recommendation against them. In nearly all cases in widely held corporations - even those with only one class of stock - the management toadies dutifully follow management guidance.

      4. Anonymous Coward
        Anonymous Coward

        Re: Meh

        This is the point.

        The ‘outsider’ shares may hold no practical voting power as even were they to bloc vote they could still be outvoted by not even all the ‘insider’ shareholders, but they do represent a bunch of money. FB sold those shares because it wanted to raise money to work with.

        I suppose that leads to an interesting question. Given FB’s behemoth status and presumably very healthy cash flow due to advertising operations, would even a shareholder apocalypse of all the outsiders sells by up affect it in any meaningful way?

    2. Jemma Silver badge

      Re: Meh

      I think a quote from Avatar is apt for arsebook and Herr Zuckwit..

      "They're pissing on us without even the courtesy of calling it rain".

      But the really fun part is everyone is letting them do it. Don't want the Zuckwit and Arsebook doing what they do?

      Delete your profile, delete your kids account, talk to your teenage child (yes it is possible to do this) and suggest her guide to blowjob techniques at age 17 is possibly not a good thing to blog on arsebook - and that all their information is being stolen. No Facebookwits, no facebook.

      Myspace imploded because people walked away, and so far as I know it wasn't as pernicious as facebook - although that default friend cretin looked like a trainee serial killer..

      If we want to put arsebook out of our misery all we need to do is walk away. Once the people aren't there the money will dry up faster than the Cali gold rush - and it'll be a ghost town with just the equivalent of an old caretaker (and human centipede breeder) - something for Michael Gove to aspire to as a retirement hobby..

      1. Charles 9 Silver badge

        Re: Meh

        But there's a thing as "critical mass" where once you hit the tipping point the reaction pretty much becomes self-sustaining. MySpace didn't reach that point before Facebook took over, but it seems Facebook has reached critical mass if they can get dumbphone makers to put in Facebook apps. Walking away from something with that many people in it becomes akin to walking on the sun: you can do it, but you're more likely to hurt yourself in so doing. And since Facebook is multi-national, no one country is likely to be able to dictate terms to them. Not even the EU since FB has a strong presence in Asia (THE most populous part of the global population).

        1. el kabong

          Critical mass

          "..once you hit the tipping point the reaction pretty much becomes self-sustaining."

          Until it does not, once the mass is consumed the reaction is no more.

          It happened to myspace, it will happen to farcebook, people's preferences change. zuckerborg got his hands on something quite precious and he's wasting it all, the fool!

        2. Mark 85 Silver badge

          Re: Meh

          Exactly how will walking away from FB hurt a user? If the users walk, FB dies a slow and lingering death. Last I heard, MySpace is still alive.... barely, but still alive. Has this caused anyone great harm other than the shareholders/owner?

          There's too much self-importance attached to FB and the next "big thing" is probably in the not too distant future.

          1. Charles 9 Silver badge

            Re: Meh

            "Exactly how will walking away from FB hurt a user? If the users walk, FB dies a slow and lingering death. Last I heard, MySpace is still alive.... barely, but still alive. Has this caused anyone great harm other than the shareholders/owner?"

            If ONE user walks away, little happens. MySpace got predated by Facebook BEFORE it reached critical mass, but now Facebook is so big it's going to take something pretty extraordinary to make something that can eat Facebook for lunch. That's the issue. For Facebook to wither on the vine, you pretty much have to convince a billion users to switch. Two questions: to where and why?

          2. CrazyOldCatMan Silver badge

            Re: Meh

            If the users walk, FB dies a slow and lingering death

            Indeed. And (hopefully) it'll be an exponential death. Facebook makes money by selling adverts (amongst other things) and if the user count (and user engagement count) starts dropping then the big advert brokers will walk away.

            At which point, Facebook starts losing money hand over fist and (eventually) either gets sold for a pittance to the Next Big Thing or (preferrably) expires.

            1. Charles 9 Silver badge

              Re: Meh

              The count would have to drop pretty significantly to make it stick. Otherwise, social pressures will probably see them come crawling back. What could conceivably make people go away and STAY away is what you really need to ask. Remember, most people don't care too much about privacy (see all the Facebook posts in addition to NSFW selfies and so on).

      2. Doctor Syntax Silver badge

        Re: Meh

        "all we need to do is walk away."

        I would if I could but I can't - for a very good reason.

    3. tom dial Silver badge

      Re: Meh

      Generally on the mark and worth another upvote.

      However, selling of shares has no effect on the company's available capital. The company got whatever they got when it sold the shares originally. Later sales do not affect that, and even a possible effect on capital to be raised by future issues is highly contingent on market conditions at the time of any such issues.

  2. Anonymous Coward
    Anonymous Coward

    With apologies to "Die Hard"

    ...the company that could not be tamed is tamed ... Theo I give you - capitalism !

    Wasn't investor pressure (I love the snappy sound of that. Expect to hear it a lot in future) partly behind the demise of Phorm ?

    This is why MegaCorps hate transparency. Investors get to know what their money is doing, and are therefore susceptible to social media campaigns ... as certain inflammatory rags losing advertising have found.

  3. Voland's right hand Silver badge

    the dogs bark, but the caravan goes on

    As the turks say, the dogs bark, but the caravan goes on.

    Or the Russian equivalent from Krylov's fables: А Васька слушает да ест. (The cat listens, but continues to eat).

    1. Jemma Silver badge

      Re: the dogs bark, but the caravan goes on

      The Russians obviously hadn't met the local cats..

      If they had the Russian proverb would be..

      "The cat listens, but continues to blatantly lick its crotch.. In public"

      Or

      "The cat listens, but continues to drop a grogan on your doormat"

      Or for the 3am experience

      "The cat listens, but still makes noises like a baby being disembowelled at 0 dark hundred"

      Or a personal favourite.

      "The cat listens, until your front wheel is 18" away, and *then* it tries to cross"

      1. thegroucho
        Pint

        Re: the dogs bark, but the caravan goes on

        I loved the Avatar quote (I forgot about it and I have seen the movie a few times) but the cat references totally take the biscuit!

        I think I need to appreciate my cat's behaviour a lot more and the occasional episode of cat puke or dead creature I step in early in the morning (invariably without shoes on) must be considered in the light of above.

      2. Voland's right hand Silver badge

        Re: the dogs bark, but the caravan goes on

        "The cat listens, but continues to blatantly lick its crotch.. In public"

        That's not a proverb - it is a quote from a fable where the cat pinches a huge slice of ham and is being chastised by the cook. "You bad kittie, do you have no shame, and so on". And the cat continues eating regardless. The morale is: "there is no point chastising if you cannot back it up with a stick".

        I agree on the "if it was a proverb" though :)

      3. CrazyOldCatMan Silver badge

        Re: the dogs bark, but the caravan goes on

        The cat listens, until your front wheel is 18" away, and *then* it tries to cross

        Thankfully mine are too clued up for that. Except for the airhead one - which is why she now has a titanium pelvis and no tail..

        (And Latest Kitty is very, very bright and has been taking lessons from Oldest Cat about road sense. Mind you, she lived for over month as a very young[2] feral cat in a friends garden[1] and he lived on a fairly busy road.

        [1] Which is why he now has two mouse-free sheds..

        [2] She was about 4 months old when we rescued her.

    2. handleoclast Silver badge

      Re: the dogs bark, but the caravan goes on

      The cat listens, but continues to eat

      Really? Not in my experience. The cat goes deaf, dumb and blind whilst eating. Total concentration on the food. That's my experience.

  4. Jeff 11

    "Cry me a river. In a market economy if you do not like how the company is acting on your behalf sell your shares. When the shares were bought I expect the situation was the same, so if they dont like the situation they can remove themselves easily.

    In the market your money is your vote, use it."

    You're not wrong, but I imagine the asset managers' desire to be seen as 'caring shareholders' is eclipsed by their desire for profit, and this is simply a publicity stunt.

    1. tom dial Silver badge

      Asset managers are likely to have a legal fiduciary duty and a contractual obligation to manage the assets for the benefit of the beneficial owners. Any desire they might possibly have to be seen as "caring" generally would be subordinate to that.

      Individual shareholders, and participants in funds set up with "social responsibility" in their goal set can do otherwise.

  5. Pascal Monett Silver badge
    Facepalm

    "the assembled group applauded his entrance and exit"

    So the sheeple still go "baaa" on cue.

    Congratulations. Way to make The Zuck still believe he is doing The Right Thing (TM). His Apology Tour turned out to be a Meet the Politicos Tour with hardly any rough spots, now his annual shareholder meeting starts and ends with applause.

    People, he ain't never gonna learn he's doin' wrong if you keep behavin' like that.

  6. iron Silver badge

    the assembled group applauded his entrance and exit

    Idiots. If you want to enact change you need to make Zuck feel disliked. You should have booed him on and off the stage. Only once he realises being CEO of Facebook doesn't automatically make everyone in the world his friend will he even consider change.

    1. chivo243 Silver badge
      Happy

      Re: the assembled group applauded his entrance and exit

      @iron

      Zuck feel disliked... ...everyone in the world his friend.

      Like and Friend in the same comment! Well done!

  7. Milton Silver badge

    Greedy hypocrites

    Wannabe shareholders were eager enough to overlook the democractic deficit when it suited them and they thought they could make scads of money doing not much.

    They snivel now that the inevitable abuse has happened.

    There is a strong ethical and governance argument that this kind of share setup should never be allowed: that your voting rights should be a direct reflection of your investment (stake as %age) in the company. Arrangements like this can create precisely the kind of unaccountability and fertile ground of abuse that we see here, as well as being unfair to entire classes of shareholders.

    Now a bunch of heavily invested shareholders of a major company that's rapidly going bad cannot, in effect, choose how their money is spent, instead being ignored by a callow boy of no great integrity who once wrote some code. Reap, sow, etc.

  8. Jim Mitchell
    WTF?

    If your "shares" come with zero control of the company, and no dividend (ie no share of the profits), just what have you bought? Something you can sell to the next sucker in line. This reminds me of bitcoin...

    1. Mark 85 Silver badge

      This reminds me of bitcoin...

      More like a Ponzi scheme.

      1. MonkeyCee Silver badge

        Get your scams right

        "More like a Ponzi scheme."

        Goddmamnit, Ponzi is not a catch all term for scams :)

        It's certainly not a Ponzi scheme, since no-one is getting paid out. There's no dividends. So they can't be taking investors money and paying it out to earlier investors.

        Now it could be a boiler room scam, where the scammers buy low and sell high, after persuading some suckers that it's totally worth buying in at the higher value. Also known as pump-and-dump. But again, doesn't really apply to FB, but maybe to BTC.

        Best description is probably "the greater fool fallacy" which is investing in something confident that you can find someone else later on to flog it too for more. In other words, it might be a bad bet (ie you're a fool for making it), but as long as you can find someone ese who is more stupid/greedy than you, then you can flog it on for a profit.

        The last one covers quite a lot of crypto speculation. It also crops a lot when investing in certain products that will almost certainly fail, but the hope is that the government will be the greater fool. Since that's the basis of pretty much all insurance companies, it's clearly not the worst idea....

  9. Tom 35 Silver badge

    How to sell shares for instant wealth

    And not have to deal with arse holes like Carl Icahn.

  10. Claptrap314 Bronze badge

    Self-entitled asses

    These "people" agreed to an arraignment wherein they would share the profit & loss of the company without control of management. They then decide that they no longer like the deal.

    https://www.nasdaq.com/symbol/fb/stock-chart

    What EXACTLY is their problem here?

    Look, I hate FB & disdain its leadership as much as the next guy, but these people are at best posturing.

  11. Fungus Bob Silver badge

    "If privacy is a human right, as stated by Microsoft's CEO..."

    WTF?! Relying on a Microsoft exec for human rights guidance is a bit like trying to order pizza with a lawn mower - there just ain't a logical connection.

    1. Anonymous Coward
      Anonymous Coward

      This is what Microsoft's self-delusion looks like:

      COMPARE A: To B:

      ---------------------------

      A:

      "Microsoft Chairman Thompson expressed distaste for companies whose ad-financed businesses share or sell user data, while declining to comment on Facebook Inc. specifically. “Many of them make money off ads and they have used that as kind of a leverage point,” he said of user data. “At Microsoft, we don’t believe in that.”

      ----------------------------

      https://www.bloomberg.com/news/articles/2018-04-30/if-microsoft-finds-another-linkedin-deal-chairman-is-all-in

      ----------------------------

      B:

      ....."When we talk about why we're upgrading the Windows 10 install base, why is that upgrade free? MS CFO asked during a meeting with Wall Street analysts. These are all new monetization opportunities once a PC is sold. Microsoft's strategy is to go low on consumer Windows licenses, hoping that that will boost device sales, which will in turn add to the pool of potential customers for 'Advertising'".....

      ....."CEO Nadella has referred to the customer revenue potential as 'lifetime value' in the past -- and did so again last week during the same meeting with Wall Street -- hinting at Microsoft's strategy to make more on the back end of the PC acquisition process. The more customers, the more money those customers will bring in as they view 'Ads'".....

      https://www.computerworld.com/article/2917799/microsoft-windows/microsoft-fleshes-out-windows-as-a-service-revenue-strategy.html

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