Today, in Facebook class-action lawsuits

Taking a break from their security- and privacy-related legal woes, Facebook is taking some time to relax, unwind, and be sued for basically fraud instead. Mazel tov!

From The Mercury News:

Not only did Facebook inflate ad-watching metrics by up to 900 percent, it knew for more than a year that its average-viewership estimates were wrong and kept quiet about it, a new legal filing claims.

A group of small advertisers suing the Menlo Park social media titan alleged in the filing that Facebook “induced” advertisers to buy video ads on its platform because advertisers believed Facebook users were watching video ads for longer than they actually were.

That “unethical, unscrupulous” behavior by Facebook constituted fraud because it was “likely to deceive” advertisers, the filing alleged.

The latest allegations arose out of a lawsuit that the advertisers filed against Mark Zuckerberg-led Facebook in federal court in 2016 over alleged inflation of ad-watching metrics.

Facebook's watch-time shenanigans were something that I'd actually heard about before; among other things, YouTubers have been complaining that Facebook does nothing to prevent videos from being ripped from YouTube and uploaded to Facebook, fully monetized, by parties other than the original creators; that Facebook counts as playtime videos that have automatically started, and been playing silently off to the side, from the moment the page can load them, whether you've paid any attention to them or not; and so on. This isn't #lyingwithstatisics; this is just plain lying.

I hadn't paid much attention to the issue until now, but it seems that others have finally taken notice. And not just YouTube creators, either, who have been relatively powerless until now to do anything which would influence Facebook's behaviour; the two platforms are rivals, after all, and FB have proven pretty conclusively that they don't care at all how much harm they do, as long as they prosper in the process. Even Google hadn't been able to do much to curb FB 's obvious bad-faith "efforts" to address the issue, which basically amounted to them saying that they'd look into it, and the doing not much of anything to actually address the problems.

And, in all fairness, FB have had a significant number of other, long-neglected, and arguably more urgent privacy and security issues that they've finally been forced to address this year, instead of looking into their video watchtime metrics. Not that they ever intended to fix their metrics, of course, but they do have something that resembles (in bad light, anyway) an excuse for ignoring them... an excuse that's about to be tested in court.

Embarrassingly, that's not the only bad news that FB have had in the last few days. One of their departing engineers has posted a 1000-word Randian screed which, in the midst of its entitled, rich-white-man politics, included these gems about the state of FB's business, as reported by Business Insider:

"Our product is also at a crossroads (and has been for years) as sharing in the Facebook app continues to dwindle," [Brian Amerige, an engineering manager of product usability at the social-networking giant] said. "The pivot to Stories will hopefully help, but I'm disappointed by how reactive our future appears to be. Ultimately, I've spent the bulk of my time at Facebook trying to build a stronger product culture."

The scale and details of the decline in Facebook sharing that Amerige referenced are not entirely clear. But there have been various indications of the trend in recent years, including a 2016 report in The Information that said personal updates among users were down 21%.

Facebook's problems with privacy and the spread of misinformation and fake news on its platform also led to the company's first decline in monthly active users— albeit a modest decline limited to Europe — in the second quarter. And CEO Mark Zuckerberg has launched an effort to promote "time well spent" on the social network, rather than incentivize the passive sharing of news articles.

Still, the comment that sharing "continues to dwindle" is likely to be a big topic that investors and analysts home in on when Facebook holds its quarterly earnings call on October 30. 

Given that Mark Zuckerberg's recent admission that the fallout from Cambridge Analytica scandal is going to continue to be a drain on FB's resources, earnings, and profitably for years to come resulted in FB shedding 160 billion dollars in market cap, I'd say that the last thing shareholders will want to hear now is that the business has been languishing at a crossroads for year, shedding their increasingly unengaged users, lurching from crisis to crisis, and fudging their own metrics to hide the problems. 

It's always hard to predict how the markets will react to things, but if you're ever planning to short FB stock, this might be the time. Worst of all for FB? They really do have bigger fish to fry, right now, and need yet another scandal like a drowning man needs rocks in his pockets.

I've said it before: Facebook are a gigantic company, and giants take a lot of killing. But given just how many truly serious problems have been lurking beneath FB's facade, and how long they've been lurking, the fact that they're all surfacing now may be the start of some truly troubled times for Zuckerberg & co. Watch this space...