Facebook Loses $37 Billion in Value Following Data Privacy Scandal

Facebook March 19 saw its market cap plummet $37 billion after media reports said the social media behemoth violated privacy rules selling user information to a third-party company active in the 2016 presidential election.

Specifically, The New York Times reported Facebook sold personal information of about 50 million users to Cambridge Analytica, a conservative London-based consulting firm that combines data mining and data analysis to “change audience behavior” for the electoral process.

Facebook, which became aware of the data breach in 2015, according to the Times, has been under pressure to do more about the spread of politically-motivated fake news posts during the election.

Last November, the paper reported that many of the posts on Facebook had been paid for by Russian operatives seeking to disrupt the electoral process in favor of Donald Trump.

“America, we have a problem,” Rep. Jackie Speier (D-CA), a member of the House Intelligence Committee, said at the time. “We basically have the brightest minds of our tech community here and Russia was able to weaponize your platforms to divide us, to dupe us and to discredit democracy.”

Now, members of Congress want to grill Facebook and other tech companies about data security.

Lawmakers Amy Klobuchar (D-MN) and John Kennedy (R-LA) March 19 called on Facebook founder/CEO Mark Zuckerberg to appear before Congress to answer questions.

“While Facebook has pledged to enforce its policies to protect people’s information, questions remain as to whether those policies are sufficient and whether Congress should take action to protect people’s private information,” Klobuchar and Kennedy said in a joint statement. “The lack of oversight on how data is stored and how political advertisements are sold raises concerns about the integrity of American elections as well as privacy rights.”

Separately, Facebook reportedly will hold an open meeting with employees March 20 to discuss the Cambridge debacle. Alex Stamos, chief information security officer at Facebook, has already announced plans to leave the company this summer.

 

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