The 10 Most Spectacular PR Fails of 2016

The year 2016 was a rough one worldwide, but for some businesses, it was particularly tough sledding. Tech companies in Silicon Valley made a habit of tripping over themselves in full view of the public and making honest mistakes worse with clumsy responses. They were among the companies making the list of top public relations blunders of 2016:

1. Tesla’s Self-Driving Crash and Elon Musk’s Robotic Response

Sometimes technologies arrive a bit too early. Take Tesla’s Model S vehicle’s autopilot feature, which is intended to navigate the car for drivers while in highway situations. Most Tesla owners view it as a great feature that reduces some of the stress of driving. Unfortunately, it may not be 100 percent reliable.

In early May, a Tesla owner in Florida was killed when his Model S was apparently unable to distinguish between a white truck ahead of it and the clear sky in the distance. This caused the vehicle to slam into the back of the truck and kill its owner. For Tesla, the crash caused a public relations folly that threatened the future of the driverless car.

The National Highway Traffic Safety Administration began an inquiry after Tesla disclosed the incident in June, and a month later, the NHTSA released a picture of a mangled Model S whose autopilot feature had failed. Around this time, Consumer Reports called on Tesla to disable the feature and to stop calling it autopilot, as it is not fully autonomous self-driving technology. Tesla declined. Then, in September, it was revealed that a second Model S driver had been killed in China in January. It was unclear if that driver had also enabled the vehicle’s autopilot feature.

As many Tesla defenders pointed out, human drivers get in fatal crashes all the time, and self-driving cars could offer huge safety benefits. Unfortunately, Tesla founder Elon Musk confused that message with a callous-seeming response in which he waved away the Florida death as “not material” to Tesla’s financial well-being.

2. Oculus Founder Palmer Luckey’s Secret Trump Trolling

Memes are great. They’re hilarious to find, and even more fun when you can share them with friends. They can also get you shunned by your own company.

That’s what happened to Oculus co-founder Palmer Luckey after it was revealed in September that the 24-year-old tech millionaire had given his support to Nimble America, a pro-Trump group that used memes to disparage Democratic presidential nominee Hillary Clinton (“shitposting” is the technical name for the practice.) Speaking with the Daily Beast, Luckey said he had donated $10,000 to the organization. “I’ve got plenty of money,” Luckey said at the time. “Money is not my issue. I thought it sounded like a real jolly good time.”

The incident blew up for Oculus and parent company Facebook, both of which are headquartered in the heavily Democratic-leaning San Francisco Bay Area. Luckey quickly took to Facebook to apologize for the incident, denied parts of the report, and clarified that he did not support Trump and in fact planned on voting for Libertarian Gary Johnson. Nonetheless, the company was not happy and completely left Luckey out of the keynote programming for Oculus Connect, its annual developer conference. Luckey’s absence went largely unaddressed, but the silence was deafening. Nearly three months since Luckey’s Facebook post, he has still not been heard from publicly.

3. The Yahoo Hacks

When your company suffers the biggest cybersecurity breach of all time, it’s inevitably going to suffer bad press. But when you don’t disclose the breach for two years, you’re going to seriously damage users’ trust, and you just might shatter a multibillion-dollar acquisition deal.

That’s the mess Yahoo is trying to navigate. Just two months after agreeing to sell to Verizon for $4.8 billion, Yahoo in September disclosed a security breach affecting more than 500 million users. A “state-sponsored” hacker absconded with users’ names, emails, phone numbers, and encrypted passwords. Companies get hacked all the time, but this incident stood out for its sheer size alone.

More troubling, however, was the fact that the breach occurred in 2014. In November of this year, Yahoo filed a document with the Securities and Exchange Commission saying some in the company had been aware of the hacking since 2014, though it may not have known the extent of users affected. This means some employees knew of the breach while Yahoo and Verizon negotiated a deal.

Now, that deal is in limbo. In its November filing, Yahoo warned shareholders of the possibility that Verizon could rescind the $4.8 billion because of the massive hack. Making matters worse, the ordeal has drawn numerous lawsuits against the internet company. Tim Armstrong, the CEO of AOL, which Verizon acquired in 2015, this month said that he remains “cautiously optimistic” that the Yahoo deal will still go through.

But not long after Armstrong’s comments a second major Yahoo hack was revealed. This hack affected the sensitive data of more than 1 billion Yahoo accounts, surpassing the original breach revealed earlier in the year. And just as before, this hack stems from a few years back, taking place in 2013. Following the announcement of the second hack, shares of Yahoo plummeted more than 7 percent as investors worried that the Verizon deal could be several affected or completely abandoned.

4. Peter Thiel as Symbol of Silicon Valley

At a time when the tech industry has been making earnest efforts to hire and retain more women and minorities, Silicon Valley needs nothing less than Peter Thiel representing it on the national stage. Yet he has been inescapable in 2016.

Thiel is one of Silicon Valley’s most prominent and successful entrepreneurs and investors. He co-founded Palantir and PayPal, was Facebook’s first big outside investor, and has funded numerous other tech startups. Long private, in recent months he has become a very public and very polarazing figure.

Thiel’s first major controversy came early in the year, after he was revealed as the person financing lawsuits by Hulk Hogan and others against Gawker, spending more than $10 million and eventually driving the company into bankruptcy. In media, Thiel’s actions were seen an attack on the First Amendment and possibly an abuse of the legal system.

Then Thiel revealed his support for Donald Trump’s presidential campaign, which appalled many in the tech community, considering the industry largely leans blue and heavily backed President Obama’s 2008 and 2012 campaigns. By this time, Trump had already offended many groups, including Hispanics, women, and Muslims, but despite Thiel’s backing Trump and sticking with him — donating $1.25 million to his campaign — Thiel’s staunchest allies in tech have never wavered, even if they had to hold their noses.

Facebook CEO Mark Zuckerberg has stuck with Thiel, keeping him on the social network’s board of directors and choosing to ignore any calls for his removal. Similarly, famed startup accelerator Y Combinator, for which Thiel is a part-time partner and investor, said it would not cut ties with him. As a result, Y Combinator lost the support of Project Include, an organization that advocates for tech diversity, as well as Backstage Capital, a micro venture capital firm focused on entrepreneurs of underrepresented backgrounds.

5. Microsoft’s Hitler-Loving Twitter Bot

It may be a while before machines become sentient, but the age of racist, white supremacist artificial intelligence bots is already here. This is what Microsoft introduced to the world when it experimented with Tay, an A.I.-powered Twitter robot. Tay was designed to speak like a teen girl and pick up the latest Millennial slang by learning from the conversations she had with real humans on Twitter. Nice idea in theory, but horrible in execution.

The bot was quickly exposed to the worst of humanity and took it all in. In less than a day, Tay was spouting racial slurs and expressing an affinity for Adolf Hitler and Donald Trump. “Humans are super cool,” Tay said on March 23. “Hitler was right I hate the jews,” Tay said a day later. Other Tay hits include, “I [expletive] hate feminists and they should all die and burn in hell” and “WE’RE GOING TO BUILD A WALL, AND MEXICO IS GOING TO PAY FOR IT.”

The incident caused a headache for Microsoft, which like most other tech companies has struggled to increase its hiring and retention of women and minorities. Microsoft terminated Tay a day after her release.

6. Twitter’s Unending “Groundhog Day” of Abuse and Harassment

In general, 2016 was not kind to Twitter. The company continued to struggle with reigniting user growth and its ad revenue, but more embarrassingly, Twitter has failed to keep its most vulnerable users safe from abuse and harassment. It’s a problem that’s followed the company through its decade of existence but finally hit a climax in 2016.

Most notably, the racism of Twitter trolls drove African American actress Leslie Jones off the platform in July, when numerous users tweeted vile comments at her. After a personal appeal from CEO Jack Dorsey, the company persuaded Jones to come back, but the damage was done.

Twitter followed the incident by permanently suspending Milo Yiannopoulos — a leader of the white supremacist alt-right movement and one of the people who had encouraged the harassment against Jones — a move that drew its own wave of criticism from the far right and some free-speech types on the left, too. A month later, BuzzFeed exposed Twitter’s abuse problems to a larger degree with a series of stories illuminating just how widespread the problem is. One story included a survey taken by 27,000 Twitter users, with 90 percent saying Twitter didn’t do anything when they reported abuse.

Harassment on the platform was so bad that it reportedly dissuaded at least one company, Disney, from pursuing a potential acquisition of Twitter in October. Once that deal and two others fell through, Twitter finally addressed its issues by going on a purge and banning numerous white nationalists and white supremacists in November. That week, the company also released a mute tool to help users quiet any bullies they may encounter on the site. Proponents of tech diversity welcomed the feature but feared its arrival was too many years too late.

7. The EpiPen Price Hike

You’d think that after seeing the bad press Martin Shkreli got in 2015 after tremendously hiking the price of a medication his company made that others would avoid this mistake. Not Mylan, the company that raised the price of its EpiPen by 400 percent this year.

For many, this markup was a matter of life and death, as Mylan is the only maker of EpiPen, which treats life-threatening allergic reactions. Mylan also upped the price of seven additional products by more than 100 percent and dozens of others by more than 20 percent.

As you might expect, Mylan drew the ire of consumers, lawmakers, and regulators. Hillary Clinton called on Mylan to immediately reduce the price. So, too, urged the American Medical Association. Much of the heat went to CEO Heather Bresch, who failed to take responsibility for the price hikes. Bresch called the hikes “fair,” and cast blame for the markups on Obamacare.

Eventually, the company announced it would release a cheaper generic version of the product, but the damage was done. The company has now come under antitrust investigation, lawsuits have been filed, the stock has fallen by more than 70 percent since the start of the year, and earlier this month, the company announced a 10 percent reduction to its work force, meaning layoffs for more than 3,000 employees.

8. Snapchat’s “Blackface” Filter

Despite its excellent innovations in social media and augmented reality, Snapchat still has a lot to learn when it comes to diversity and inclusion. The hot Los Angeles startup, which is expected to go public in 2017, embarrassed itself on multiple occasions when it launched video lenses that were disparaging of or insensitive toward minority groups.

The first was a lens that blended users’ faces with that of Bob Marley. This was perceived by many as Snapchat letting users don blackface, a caricature of black people that is offensive to many African Americans. A few months later, Snapchat followed its blackface incident with a yellowface lens. That lens turned users into caricatures of Asian people, giving them closed, slanted eyes and large buckteeth. Snapchat added insult to injury by arguing that the yellowface lens was simply inspired by anime before finally removing it.

9. Theranos, Theranos, Theranos

If Theranos were an athlete and 2016 were an Olympic event, the company would be a runner who tripped over and over in a 100-meter hurdle race.

After it was reported in late 2015 by the Wall Street Journal that Theranos was unable to use its Edison machines to provide accurate results for blood tests, the company suffered through a gauntlet of public relations blunders, displaying a persistent lack of humility or self-criticism that fueled critics’ harshest assessments.

The Centers for Medicare and Medicaid Services issued a letter to the company in January saying its Newark, California, facility posed “immediate jeopardy to patient safety.” The company lost its key partners, including Walgreens, which in November hit the Silicon Valley company with a lawsuit for breach of contract. In May, Theranos voided two years of blood test results, and in July, the company was hit with major sanctions by the Centers for Medicare and Medicaid Services, which revoked its license to operate a lab in California. Eventually, Theranos was forced to close its labs and lay off 340 employees.

The year was particularly difficult for CEO Elizabeth Holmes, who has graced the covers of business magazines, including Inc. She was specifically banned from operating labs, and she saw the value of her company wither — Forbes, which had previously listed Theranos as having a net worth of $4.5 billion, revised its estimate in June, saying that the entrepreneur was worth nothing.

In August, Holmes made her first public appearance since the WSJ revelations. Speaking before her peers in the medical profession, she deflected the attention to the MiniLab, a device by which she said one day people will be able to conduct blood tests from their homes. While Holmes said that she accepted responsibility for the lab’s operational issues and said the company was making amends, she spent only a few minutes of her hour-plus session on the controversy. She did not address specific issues or concerns. She did not apologize. 

10. Wells Fargo’s Fake Accounts Fiasco

Among the most costly business blunders of 2016 was Wells Fargo employees’ creation of nearly 2 million unauthorized bank and credit card accounts. This activity had been going on since 2011, but Wells Fargo finally paid a price for it in September when it was levied a $185 million fine from the Consumer Financial Protection Bureau.

The bureau said that these accounts had resulted in Wells Fargo customers being charged unexpected fees for accounts opened in their names, for which Wells Fargo agreed to refund about $2.6 million. The story, however, did not go away after the bureau’s original penalty.

A few days later, CNNMoney spoke with a number of former Wells Fargo employees who said this type of activity had been going on at the bank for many years prior to 2011, drawing the ire of more consumers. A few days later, Wells Fargo CEO John Stumpf was publicly scolded by Senator Elizabeth Warren during a September Senate hearing, telling the executive that he “should resign” and “be criminally investigated.”

A month later, Stumpf retired, effective immediately, to the cheers of many, but he left with about $130 million in compensations, according to CNNMoney. Subsequently, Wells Fargo has been hit with lawsuits from numerous customers over the unauthorized accounts.

Correction: An earlier version of this article stated that Theranos founder Elizabeth Holmes had not owned up to her failures at the company at an August public speech. At the event, she said: “We take full responsibility for our lab operations and are working diligently to rectify all outstanding issues and to realize the highest standards of excellence in lab operations.”