INTERNATIONAL - Facebook’s stock price dropped by nearly 7 percent due to reports of the company sharing data of up to 50 million users with the political data analytics company Cambridge Analytica.
The drop the most that Facebook has fallen in a single day in over five years and the company was not in a good position Within the indexes for major tech and financial companies like the Nasdaq 100 and the S&P 500 reported Bloomberg.
The loss cut into Facebook’s market capitalisation by around $43 billion ( R516 397 750 000,00) or $15 (R180,09) per share.
Other publicly traded social network companies are also seeing the effects, with declines on both Twitter and Snap this morning.
On Friday, Facebook announced that it had suspended Cambridge Analytica for violating its Terms of Service by sharing millions of users’ data without their consent.
Cambridge Analytica is partly owned by hedge fund billionaire Robert Mercer and played a role in Trump’s 2016 presidential campaign, and the connection raises continued concerns over the influence Facebook had in the election.
According to The New York Times, the co-founder of Cambridge Analytica, Christopher Wylie, led an initiative starting in 2014 to help political campaigns gain data on people’s political orientations and personal details. The company could not easily obtain such data through its own means, so it harvested data from Facebook instead.
By creating the app “thisisyourdigitallife” in 2015, University of Cambridge psychology professor Dr. Aleksandr Kogan obtained permission to access user account data and information about the friends of each person who downloaded the app.
In a statement, Facebook said, “Kogan gained access to this information in a legitimate way and through the proper channels that governed all developers on Facebook at that time.”
Recently, Facebook faced new calls for regulation from within US Congress and was hit with questions about personal data safeguards.
The scrutiny presented a new threat to Facebook’s reputation, which was already under attack over Russians’ alleged use of Facebook tools to sway US voters before and after the 2016 elections.
“It’s clear these platforms can’t police themselves,” Democratic US Senator Amy Klobuchar tweeted. “They say ‘trust us.’ Mark Zuckerberg needs to testify before Senate Judiciary,” she added.
- BUSINESS REPORT ONLINE