Facebook has been hit by a shareholder revolt over its messaging encryption plans that critics claim will turn it into a “dangerous playground” exploited by child abusers.
Rebel shareholders are believed to have secured nearly half the non-management shareholder votes for a resolution urging the company to postpone and review its encryption plans.
They said encryption should not go ahead until the company had assessed its “potential adverse impacts to children,” to the company’s reputation and to its ability to operate if regulators took action.
However, the resolution was defeated as Facebook’s founder Mark Zuckerberg and his supporters deployed their votes. Under the company’s “twin-track” system, they have ten times the voting power per share compared to everyone else.
The full results of the vote on the resolution are still to be declared but the rebel shareholders estimate they had more than the 43 per cent of the non-management votes that they achieved with a similar resolution last year. It accounted for 12.64 per cent of the votes overall.
The move increases pressure on Facebook which has been criticised by the UK and US Governments over the encryption plans which they say will wipe out 70 per cent of the child abuse alerts passed to law enforcement investigators.
The rebel group is led by Lisette Cooper, vice chair of Fiduciary Trust International and has been backed by ISS and Glass Lewis, who wield significant voting power as proxies for multiple shareholders.
The resolution was supported by testimony from a child abuse victim, Sarah Cooper, who was groomed as a teenager on Facebook and then sexually abused after meeting the man who had masqueraded as a boy.
“For years, I was unaware of the dangers lurking on the internet, until I myself became a target,” Ms Cooper said. “I was lucky enough to have been rescued by a friend and thankfully survived my ordeal, some are not as lucky and never make it home.
“Facebook admitted that in going forward with implementing end-to-end encryption it will not be able to see child sexual abuse materials online, and the number of these reports will go down. Therefore, the number of children’s lives that could be saved or helped, will be less.
“Facebook needs to immediately improve age verification, increase human monitoring of content, work in tighter cooperation with law enforcement – and it should absolutely delay expanding encryption on its platforms until it can protect children.
“Privacy is important, but we need a balance of privacy and protection of the most vulnerable members of society, our children. “Facebook is a great platform, but it is not a safe platform. And with encryption it will become one of the world’s most dangerous ’playgrounds’ for children.”
The Home Office has estimated Facebook’s plans would remove 12 million reports of child abuse to the National Centre for Missing and Exploited Children (NCMEC) every year, which led to more than 2,500 arrests in the UK and 3,000 British children being safeguarded.
Andy Burrows, NSPCC Head of Child Safety Online Policy, said: “The fact that Facebook voted down a requirement to risk assess the impact on child abuse of such an important design choice speaks volumes.
“The company should be transparent and do the due diligence that’s needed to understand the risks to children of end-to-end encryption, but instead is choosing to turning a blind eye.
“This underlines not only why we need regulation to ensure tech firms protect users, but also why responsibility has to rest with senior management for product decisions and complying with the Duty of Care.”
Facebook said: “We have robust policies to help protect against child exploitation and content or behavior on our platform that puts the safety of children at risk.”