Chik-fil-A: Holier than thou (until it becomes inconvenient)

Chick-fil-A, the Atlanta-based fast-food chain,  has long made the spirituality of its founder a visible and public aspect of its operations.

All of the chain’s 1,600-plus locations are closed on Sunday, and founder Truett Cathy was never shy about public statements that he sought out franchisees who shared his religious and moral beliefs. Charitable contributions by the chain to anti-gay organizations have been a contentious point among some consumers – and the source of an ongoing if ineffective boycott – for some time.

But Cathy’s son Dan, president and CEO of Chick-fil-A, recently used an interview with the Baptist Press to detail how his personal values are translated into corporate values. For example, he was quoted as saying:

“Our work should be an act of worship. Our work should be our mission field. As long as we are stateside, let’s don’t think we have to go on mission trips by getting a passport. … If you’re obedient to God you are going to be evangelistic in the quality of the work you do, using that as a portal to share [Christ].”

And:

“We are very much supportive of the family — the biblical definition of the family unit. We are a family-owned business, a family-led business, and we are married to our first wives. We give God thanks for that.

That’s the statement which sparked Jim Henson Co. to sever a promotional partnership between Chick-fil-A and The Muppets. Mini-Muppet puppets are no longer available with Chick-fil-A kid meals because, according to Business Insider, the Jim Henson Co…

… did “not wish to partner with them on any future endeavors” due to Chick-fil-A CEO Dan Cathy’s admission that he was “guilty as charged” when it comes to his Christian stance on the definition of marriage.

Chick-fil-A responded the next day by offering a very different version of the truth. It said the Muppets were pulled for safety reasons because they kept kept getting stuck on kids’ fingers.

That story was such a departure from the known facts that it almost makes you laugh out loud. Commentators have been accusing the company of lying ever since – not, one would assume, a core Chick-fil-A value.

It got weirder still when Chick-fil-A apparently began an abortive social media campaign to defend itself by allegedly launching a Facebook page that pretended to belong to a teenage girl who liked to quote the Bible and possessed an unusual knowledge of  details about the company’s promotional timeline.

Here’s a comprehensive review of the issue, published by MinnPost.

For a number of consumers, Chik-fil-A’s socially conservative position on homosexuality is the big issue.

But for us, that’s really not the point. Chik-fil-A’s owners can choose to run the company any way they like as long as they don’t violate anti-discrimination laws. If they want to risk alienating a certain percentage of their prospective customers, that’s their choice – and it would be hard to argue it’s failed the $4.1 billion company so far.

But now that position may be hurting the company in new ways. In Chicago, the opening of a new location is being stalled by a City Council member based, he says, on unsatisfactory written anti-discrimination policies.

And in Boston, Mayor Thomas Menino issued a public statement saying Chick-fil-A would be less than welcome if it continues to pursue expansion efforts there.

According to one wide-ranging if not necessarily scientific study, Chik-fil-A’s popularity has taken a whopping 40% tumble since Dan Cathy’s recent interview, according to a post at examiner.com.

What is Chick-fil-A’s response? It has decided not to assume the CEO’s missionary position after all. The company issued this statement:

“The Chick-fil-A culture and service tradition in our restaurants is to treat every person with honor, dignity and respect — regardless of their belief, race, creed, sexual orientation or gender… Going forward, our intent is to leave the policy debate over same-sex marriage to the government and political arena.”

So why write about Chick-fil-A at all? Because it has demonstrated the fallacy of the Cult of Capitalism, which espouses that society’s biggest issues can be resolved simply by turning them over to the money-makers and job creators.

What happened when Dan Cathy and Chick-fil-A tried to address what they perceive as a societal issue? They chickened out. They decided that what their religion says about homosexuality – and telling the truth – is less important than what the balance sheet says about the business.

Are you saying “Duh”?

So why does anybody believe the private sector’s pure instinct to amass capital can help us address any other societal issue, such as environmental custodianship, access to health care or preservation of the American Dream?

In a sad sidebar to this story, Chick-fil-A spokesman Donald Perry, vice president of public relations, died suddenly on Friday, July 27. Cause of death was not immediately available. He worked at the company for nearly 29 years.

 

FB FU: Facebook’s unfriendly IPO

Photo credit: Freedigitalphotos.net

Big money has done it again. Since 2008, Wall Street banks have been trying to convince the public that the financial collapse was just an aberration, and that less government oversight of banking practices will be better for everyone.

Just as the public, with its notoriously short memory and forgiving attitude, was beginning to let bygones be bygones, Fac

ebook and investment bank Morgan Stanley have reminded us that allowing big money to regulate itself is a lot like … well, er … putting your money into the hands of an irresponsible, greedy stranger.

The story is that Facebook’s highly publicized initial public offering released stock at the price of $38 a share; the initial flurry quickly raised that price to as high as $45. While large, institutional investors reportedly kept their money in their pockets, individuals bought up a good percentage of the available stock. And within two days, the price had dropped almost 20%.

Only then was it disclosed certain large investors may have received verbal guidance that Facebook was about to deliver a big disappointment in its quarterly earnings. No wonder they sat out – satisfied to watch as the suckers who didn’t have access to the relevant financial information tossed their cash into a stock that was now seen as overpriced and certain to be a bad

short-term investment.

Eventually the large investors will buy up Facebook stock. Experts are speculating that will likely happen when small investors get scared and disgusted and start dumping their $38-a-share purchases at prices as low as $22.

The comeuppance is that Facebook and its lead underwriter, investment bank Morgan Stanley, now face a series of lawsuits – filed less than a week after the yawn-inspiring IPO – for allegedly failing to share material information equally with all investors.

There is plenty of irony in this episode. Facebook has been perceived as among the most egalitarian of media, where individuals were assumed to be in charge. Facebook users who bought stock hoped to leverage their own passion for social media into a solid financial gain. Instead they’ve been exploited, just as they are every time Facebook users their data to throw unproductive advertising at them.

It’s also ironic because Wall Street’s big money machine has spent the last four years trying to convince the public that government-imposed constraints were a primary cause of the financial meltdown and sluggish recovery. But like the mortgage crisis and the more recent explosion in banking fees, this most visible IPO in history demonstrates another dynamic – that Wall Street’s true concern is to take care of its own, even at the expense of its customers.

For its part, Morgan Stanley claims it did nothing wrong, and that it followed the same procedures it follows for all IPOs. If that’s the case – and it certainly may be – then it may be time for the Securities Exchange Commission to take another look at the regulations. And it’s certainly reasonable for small investors to question whether they can ever get a fair shake with Wall Street.

For everybody else, it’s simply a fair reminder that you don’t leave the fox in charge of the henhouse.

 

Yahoo’s new idea: No new ideas

 

Photo courtesy of Stuart Miles, Freedigitalphotos.net

Yahoo, out of original ideas to end its losing streak, is now turning to shakedowns of online competitors. So says Business Insider, in its commentary on reports that Yahoo is preparing to sue Facebook for infringement of up to 20 Yahoo patents on technologies involving “advertising, the personalization of Web sites, social networking and messaging.”

It’s been a long time since anybody had much good to say about Yahoo’s direction and long-term prospects. Google has been shedding its “Don’t Be Evil” philosophy in a flurry of impressive – if not always beloved – moves that make it ever-more valuable to marketers.

And Facebook has been figuring out more and more ways to make money by increasing its presence in the everyday lives of internet users. Even frumpy old AOL has dug in hard in an effort to corner the hyperlocal market – though its Patch.com unit is said to be losing as much as $130 million a year and few observers give it much chance of success.

Meanwhile, what has Yahoo done? While it’s market share in online ad sales continues to decline, executives seem to have spent the last 3 years trying to sell the company and not much more. yippee.

One for the big guy: Facebook awarded $75k from schmoe

Paul Ceglia is a nobody who become a short-term somebody by claiming that Mark Zuckerberg “had signed over 84% of Facebook to him in exchange for $1,000,” according to PaidContent.

He even produced a contract to prove it. In court the contract was eventually ruled a fake and the case was tossed out. Ceglia was ordered to pay $5,000 in damages.

Now in an ironic epilogue, as Mark Zuckerberg prepares his company to go public – which will turn him into an overnight billionaire – Ceglia has been ordered to pay $75,000 of Facebook’s legal bills in the case.

While Ceglia went through a series of lawyers in trying to push the bogus case, Facebook’s lawyers were charging hourly rates of $450 at the low end and $925 for the big guns.

Not surprisingly, Ceglia claims the payment will be a hardship.

There’s a moral here: You don’t take on big business unless you’ve got the goods. And even then – though Ceglia’s case has nothing to do with this second point – it’s going to be expensive, slow and risky.

International banks hatch scheme to manage private web data

With Facebook and other websites under global pressure for the way they care for user data, a new idea is developing to allow consumers to take back control of their own data – lending it out to organizations only as they choose.

The idea – outlined in an article by Bloomberg Businessweek – offers an interesting approach with just one catch: It’s the brainchild of SWIFT – the Society for Worldwide Interbank Financial Telecommunication, a consortium of banks.

If they ever get it off the ground, they intend to charge a fee for the service.

9 ways Facebook has disregarded your privacy

How hath Facebook disregarded the privacy of its users over the years? Let us count the ways:

  • By allowing photos and other content to remain accessible even after users deactivated or deleted their accounts, according to a settlement with the Federal Trade Commission.
  • By changing its website so information that users may have designated as private – such as their Friends List – was made public. This was done without advance warning or without seeking users’ permission, according to the FTC settlement.
  • By leading users to believe that third-party apps would only access information necessary to function – while actually allowing the apps to access nearly all of users’ personal data, even if it wasn’t necessary for the app to do its job, according to the FTC.
  • By telling users they could limit the audience for certain information (i.e. “Friends Only”) – but allowing that information to be shared with 3rd-party apps those friends were using, according to the FTC.
  • By claiming – but not actually bothering – to comply with the U.S.- European Union Safe Harbor Framework that offers protection in data transfer between and within the continents, the FTC settlement states.
  • By sharing users’ personal information with advertisers after promising not to share personal information with advertisers, the FTC contends.

The FTC didn’t accuse Facebook of intentionally breaking the law, according to a New York Times article on the settlement. But it did mandate that Facebook undergo a 3rd-party privacy audit every other year for the next 20 years, and said future violations would incur a $16,000-a-day penalty for each occurrence.

Meanwhile, in actions outside the scope of the FTC settlement, here are other ways Facebook seems to have demonstrated that privacy of its users is of minimal concern:

  • By placing users’ pictures in ads for products and services they have “liked” as an unauthorized and unpaid endorsement. Here’s an example, quoted from a  report buy PaidContent in a case that was being litigated in 2011: A Facebook user named Angel says she hit the “Like” button to get a free trial of Rosetta Stone’s translation software. Soon after, a sponsored story appeared in her friends’ news feeds showing her picture near an ad and the headline “Angel Frolicker likes Rosetta Stone.” Other plaintiffs who hit “Like” to view a photo or enter a promotion say their “Likes” were similarly hijacked.
  • By introducing as “Tag suggestions” feature that uses facial recognition technology to compare newly uploaded photographs to those of the uploader’s Facebook friends – and then prompts photo tags. Per Facebook’s habit, it was introduced on an opt-out basis – meaning users first had to figure out whether their privacy intentions had been circumvented, and then change their protective settings. European Union data-protection regulators said they would investigate whether the feature violated privacy rules, according to German news source Deutsche-Welle.
  • By placing so-called super-cookies on users’ computer that can track online activity even when you’re logged out of Facebook, according to ABC News. Facebook – being sued about the matter – conceded that some of its cookies might have such a capability but maintains that it does not track user activity outside of the Facebook environment.

For a more exhaustive overview of complaints and issues involving privacy on Facebook, here’s a well-sourced Wikipedia entry.

None of this necessarily indicates Facebook is intentionally trying to invade users’ privacy.

But it has helped Facebook earn the spot of America’s 11th most-hated company based on the American Customer Satisfaction Index, according to Business Insiders’s 18 Most Hated Companies.

Facebook’s revenue model is based on customization of advertisements based on the online activities of users.

Which means that the more information Facebook collects, the more money it can make. Therefore, Facebook’s profit motive will always conflict with the desire of users to limit who can see and use the information they provide – whether intentionally or through tracking cookies.

It’s important to know. For anyone worried about privacy, identity theft, personal security and other such issues, it means Facebook is not your friend.