Facebook Inc. (FB) announced on Thursday that it filed separate lawsuits against individuals in the U.S. and Europe for abusing its platforms to use automated software to scrape user data and distribute fake likes.
“This is one of the first times a social media company is using coordinated, multi-jurisdictional litigation to enforce its Terms and protect its users,” Facebook’s Director of Platform Enforcement and Litigation Jessica Romero said in a blog post.
In the U.S. lawsuit, Facebook sued Mohammad Zaghar for operating a data scraping service called Massroot8. The service asked people to provide their Facebook login credentials on the Massroot8 website. The credentials were then used by Zaghar’s service to scrape user data from Facebook. Zaghar collected the data by using a computer program to control a network of bots, which pretended to be an Android device connected to the official Facebook mobile app.
In the European lawsuit, the defendants MGP25 Cyberint Services and its founder, operated a Spain-based fake engagement service, and were sued for using automation software tools to distribute fake likes and comments on Instagram. Facebook added that the defendants did this for profit and continued with their actions even after the social media network sent a cease and desist letter and disabled their accounts.
Shares in Facebook have surged 61% since mid-March as the social media network has been benefiting from a user boom as the coronavirus pandemic accelerated the need for remote social engagement as well as for online business and working tools.
The stock was little changed at $235.35 in early afternoon trading on Thursday.
In light of the recent rally, the $244.93 average price target by analysts now implies limited upside of 4% in the coming 12 months. (See Facebook stock analysis on TipRanks).
Five-star analyst Justin Post at Merrill Lynch this month reiterated a Buy rating on the stock with a $265 price target, saying that Facebook has the potential to capitalize on the user surge it experienced during shelter-in-place orders.
“In the long term, the social media platform is poised to benefit from several under-monetized and under-value assets such as Messenger, Marketplaces and Watch, and material e-commerce growth opportunities”, Post wrote in a note to investors.
TipRanks data shows that overall Wall Street analysts have a bullish call on Facebook. A stellar 31 out of 35 analysts have a Buy rating on the stock with the rest keeping a Hold rating for now.
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