Facebook earns $ 9 billion despite whistleblower scandal

Facebook posted better-than-expected earnings for the third quarter as it continues to face bad press for leaked internal documents.

The social media giant made $ 9 billion (£ 6.5 billion) in profits in the three months to September, up from $ 7.8 billion last year.

However, it was hit by a new privacy update to Apple’s iOS 14 operating system, which made it harder for brands to target ads to specific users.

It comes between new claims of unethical behavior made by a former employee.

Frances Haugen has released a series of internal documents to the press, claiming that Facebook puts profit above user safety.

Several media reports claim that the documents show that Facebook failed to regularly moderate content that promoted hate speech and sex trafficking outside the United States.

On Monday, Facebook CEO Mark Zuckerburg told investors in a conference call: “What we are seeing is a coordinated effort to selectively use leaked documents to paint a false image of our company.”

In the 12 months to September 30, the social media giant said its monthly user base grew 6% to 2.91 billion.

However, despite its strong profits, its earnings are slightly below analysts’ expectations, amidst the “headwinds” caused by Apple’s privacy rules.

Facebook said the privacy update would impact its digital business in the final quarter of the year as well, but it expected to adapt to changes over time.

The company said it will spend about $ 10 billion this year on its metaverse division, known as Facebook Reality Labs, which is tasked with creating augmented and virtual reality hardware, software, and content.

The largest social media network in the world is under scrutiny by global lawmakers and regulators, including the Federal Trade Commission, which has filed an antitrust lawsuit over alleged anti-competitive practices.

The whistleblower’s papers, which were first reported by the Wall Street Journal, only intensified that pressure.

They include internal research on the effects of Instagram on teen mental health; whether Facebook’s platforms fuel the split; and the social media giant’s handling of the January 6 uprising on the Capitol.

In a hearing on Monday, Ms Haugen told British MPs that Facebook is “undoubtedly making the hate worse”.

He said Facebook’s security teams had insufficient resources and that “Facebook was unwilling to accept that even small slivers of profit were sacrificed for security.”

MPs are considering what new rules to impose on large social networks as part of the planned Online Safety Bill.

Despite the allegations, Facebook’s stock was up 1.3% in Monday’s after-hour trading. The company’s stock has risen about 20% so far this year.