Facebook, Inc. (NASDAQ:FB) alleges that three people and four companies based in China are commercially exploiting its platform by creating fake accounts and selling fake followers and likes. It says they can use fake accounts for fraudulent activities. The stock is up by 0.51% and trades at $162.28.
Facebook sues Chinese Companies
Facebook along with its Instagram filed a suit in the federal court of San Francisco against companies: Home Network, 9 Xiufei, 9Xiu Feishu, and 9 Xiu Shenzen, which are based in Shenzhen and Longyan. The complainant says they engage in the production of electronic hardware, online advertizing services, and software.
Facebook is seeking a permanent ban on those companies for their alleged role in causing monetary damages. The Chinese companies are engaged in creating and selling fake accounts for the past two years on six websites.
In authentic accounts for spamming
Facebook said inauthentic and fake accounts could be used for fraudulent activities like marketing scams, phishing campaigns, spam, and advertizing fraud and make profits. The company also noticed fake accounts on Twitter, LinkedIn, Google, Apple, and Amazon.
Facebook is facing the wrath of regulators for spreading harmful content and compromising the private data of 2.7 billion users every month. The companies worldwide are questioning the policies of Facebook over abuse of the private data of its users. Hence, Facebook mentioned about violation of the US trademark law in its lawsuit against the Chinese companies. Instagram and Facebook deactivated the 2.1 billion inauthentic accounts using AI during January and September 2018. It has even disabled such accounts within minutes of creation.
Companies worldwide use social media networks like Facebook to communicate directly with the users and spread information about products and services. Facebook is leading the trend with 2.32 billion users worldwide as on December 31, 2018, an increase of 9%. Its daily mobile active users are estimated at 1.15 billion. Facebook has seen a dramatic increase in traffic from the mobile segment. Facebook is an essential tool for businesses to enhance return on investments. Around 93.7% of businesses are active on Facebook. Twitter stands second with a percentage of 84.4%.