Facebook (FB) stole some not-so-hot headlines this week upon news that more than 17,000 people signed to join a class action lawsuit against the company in Austria.
The leader — a law student named Max Schrems — is asking Facebook to pay 500 euros per person for violating users’ privacy.
Hopefully, by now, this goes without saying … but Facebook stock investors really, really, really shouldn’t care.
As The Silicon Valley Business Journal pointed out, this latest privacy hullabaloo is hardly new for the social media site. The Journal reads:
“Facebook has been sued before over myriad privacy issues, such as collecting data for advertisers, sharing data with the National Security Agency via its PRISM program and using its users as lab rats in a mood study done in collaboration with Cornell University.”
That laundry list of privacy concerns is just a sample,. There also were concerns surrounding the new Facebook messenger app’s permissions, and the site’s partnership with Nielsen to track television-watching habits.
It doesn’t take very much looking to find some consumer privacy advocate worrying about Facebook’s latest policies, studies and ad habits.
As long as advertisers aren’t worried about those ad habits, though, Facebook stock investors (once again) really shouldn’t care (really). Advertisers won’t worry because, at the end of the day, most consumers aren’t worried. Sure, they’d prefer to have some more privacy … but most are also slowly becoming to realize that they would have to pay for that privilege. Curtis Silver of The Next Web sums it up nicely: “There is an old adage that applies here: if you don’t pay for the product — it means you are the product.” (For an in-depth look at the death of privacy, don’t miss this Guardian long read.)
It’s not just Facebook that has faced privacy concerns, either. Google (GOOG), Microsoft (MSFT), Yahoo (YHOO), LinkedIn (LNKD) and more have received similar backlash. But it has hardly correlated with stock performance … much less with privacy policies.
And that’s precisely why Facebook stock investors shouldn’t even blink at the class action lawsuit. It’s just the latest privacy headline, and it too will pass. In fact, Della Cava summed it up in an opinion piece for USA Today beautifully:
“Each time such news flares — as it did recently with the revelation that Facebook in 2012 tweaked user news feeds to gauge emotional reactions — Internet privacy activists and consumers alike react in outrage.
And each time, outrage soon gives way to business as usual.
Is it time to accept the fact that the price of living in our socially connected, high-tech age is forking over our right to do so anonymously? The glaring reality is yes.”
Business as usual is good news for Facebook stock investors, too, as shares of been on fire so far this year. So once again, when it comes to the outcry over privacy … don’t worry one little bit.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.