Facebook shares fall amid privacy backlash

About 270,000 people installed a data-harvesting Facebook app which was portrayed as part of an online personality quiz that participants were paid to take

Yes, Cambridge Analytica, the data-analysis firm that helped U.S. President Donald Trump win the 2016 election, violated rules when it obtained information from some 50 million Facebook profiles, the social-media company acknowledged late Friday.

Facebook has been unable to shake off questions over its role in the 2016 presidential election.

Tech shares were the worst-performing of the major sectors, but the broader market also has been pressured over the last couple of weeks by worries over a potential trade war and the prospect of more aggressive Fed rate hikes due to faster growth and inflation.

A top United Kingdom lawmaker on Monday backed sweeping new powers for the nation's privacy watchdog.

"Every day we have teams looking for new data sets", he told the site.

"The claim that this is a data breach is completely false", Facebook said in a new statement on Saturday, saying app users knowingly provided their information. All of that is allowed under Facebook's rules, but the professor crossed the line by sharing the information with a third party.

It said over the weekend that it was already considering the nexus of connections between Cambridge Analytica, its parent Strategic Communication Laboratories (SCL) and Cambridge University professor Aleksandr Kogan, author of the testing app.

The social network was down more than 5.5 percent to $175 a share in early morning trading. It was the biggest intraday drop since January 12.

Facebook recently suspended data analytics firm Cambridge Analytica, which had ties to the Trump campaign, for not deleting data it had collected "improperly".

Cambridge, originally funded by conservative political donor Robert Mercer, on Saturday denied that it still had access to the user data, and said it was working with Facebook on a solution.

What happens to the data you post on Facebook?

The denials and refutations did little to ease the criticism.

Lawmakers have called on Zuckerberg to explain his company's actions. He added in an interview on British radio Monday that Zuckerberg should "stop hiding behind his Facebook page and actually come out and answer questions about his company".

In another blow to Facebook, research company eMarketer said there are signs the company is losing its share in the USA digital advertising market.

"Changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months", Ives wrote in a note to investors. Social media companies (and nearly every for-profit internet company) earn a major share of their revenues by selling the data to third parties.

"I expect the companies to take more responsibility when handling our personal data", she said.

"Facebook, Google, and Twitter have amassed unprecedented amounts of personal data and use this data when selling advertising, including political advertisements", the senators wrote.

Related:

Comments


Other news