Facebook filing flags privacy risks

One thing Facebook’s IPO filing documents make clear is that the company is taking privacy risks seriously. Privacy is mentioned 35 times, mainly as a risk factor. The company acknowledges that media coverage of privacy lapses, for example, could affect profits.

“Unfavorable publicity regarding, for example, our privacy practices, product changes, product quality, litigation or regulatory activity, or the actions of our Platform developers or our users, could adversely affect our reputation. Such negative publicity also could have an adverse effect on the size, engagement, and loyalty of our user base and result in decreased revenue, which could adversely affect our business and financial results.”

The public and media scrutiny will only increase, because as a listed company, Facebook will be obliged to reveal any privacy-related investigations into its business. Facebook’s filing documents also mention, several times, the risks from changes in privacy laws both in the US and Europe.