Tuesday 26th March 2019
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As the international groundswell against Facebook’s live-streaming of the Christchurch killer’s video grows, Nikko Asset Management says its global equities team sold its stake in the social media platform more than a year ago for similar reputational issues.
Johnny Russell, one of five leaders of Nikko’s global equities team, told an investment conference in Wellington on Monday that his team decided to sell their Facebook stake in late 2017 and early 2018 because they could see the significant issues the social media giant was already facing.
That was before the news broke that Facebook had allowed Cambridge Analytica to harvest the personal information of about 50 million users which was then actively used to interfere with the United States’ 2016 presidential election.
Russell, based in Edinburgh, says it had already become evident that Facebook was having to invest significant amounts of money in remedying privacy breaches.
“The issue for us was how management was addressing the problems and the use of capital. Cash flow returns were going down,” Russell said.
“That was before Cambridge Analytica, let alone the more recent issues.”
Russell was using Facebook as an example of how environmental, social and governance issues can impact investment decisions. Nikko has US$201.8 billion in funds under management globally.
A number of individual major advertisers in New Zealand, including the big four Australian-owned banks and TSB Bank, Lotto NZ and Tourism New Zealand, reacted to Facebook’s role in the Christchurch massacre by suspending their advertising on Facebook. They are calling on the international advertising community to join their boycott.
The Association of New Zealand Advertisers and the Commercial Communications Council have also called for either immediate changes to or the complete suspension of Facebook’s live-streaming.
The advertisers are the latest in a long line of companies, including the major telecommunications providers and a number of major local fund managers, wanting change.
The government has also called on Facebook to change the way it operates. Last week, Privacy Commissioner John Edwards sent an email to a number of Facebook executives telling them that Facebook’s silence was “an insult to our grief.”
Edwards has demanded that Facebook hand over account details to the New Zealand police of all people on its network who had shared the killer’s video, saying that sharing it is an “egregious” violation of the privacy of the 50 victims who were killed and the other 50 who were injured.
Edwards had already been complaining about Facebook’s pattern of bad behaviour and broken promises on privacy values before the March 15 attack.
The Chief Censor, David Shanks, has classified the video the killer live-streamed on Facebook as “objectionable” which makes it an offence punishable by fines of up to $50,000 for individuals or $100,000 for organisations and up to 14 years in jail for knowingly sharing the material.
Protests about the killer’s video have spread well beyond New Zealand’s shores. The French Council of the Muslim Faith has formally complained about the live-streaming by Facebook and sharing of the video using the Google-owned YouTube with prosecutors in Paris.
The organisation is accusing Facebook of not taking down the video quickly enough – it took the US giant about half an hour after New Zealand police notified it to take it down.
Prime Minister Jacinda Adern has said the social media companies “have a lot of work” to do to curb the fast spread of objectionable material.
The minister responsible for the Government Communications Security Bureau, Andrew Little, has said social media will be on the agenda at the next meeting of the “Five Eyes,” a spying arrangement between New Zealand, Australia, the United States, Canada and Britain.
Australian Prime Minister Scott Morrison has also called for a G20-wide crackdown on tech giants.
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