Facebook Chief Executive Mark Zuckerberg is facing calls from US and European politicians to explain how a consultancy that worked on President Donald Trump’s election campaign gained improper access to the data of 50 million Facebook users.
Facebook’s shares closed down nearly 7 per cent Monday US time, wiping nearly $US40 billion ($52 billion) off its market value as investors worried that new legislation could damage the company’s advertising business.
“The lid is being opened on the black box of Facebook’s data practices, and the picture is not pretty,” Frank Pasquale, a University of Maryland law professor who has written about Silicon Valley’s use of data, said.
Politicians in the US, Britain and Europe have called for investigations into media reports that political analytics firm Cambridge Analytica harvested the private data on tens of millions of Facebook users to develop techniques to support Mr Trump’s 2016 presidential election campaign.
The scrutiny presents a fresh threat to the social media platform’s reputation, which is already under attack over Russia’s alleged use of the Facebook tools to sway US voters with divisive and false news posts before and after the 2016 election.
Facebook said on Monday it had hired digital forensics firm Stroz Friedberg to carry out a comprehensive audit of Cambridge Analytica, which had agreed to comply and give the forensics firm complete access to their servers and systems.
Cambridge Analytica said it strongly denies the media claims, and that it deleted all Facebook data it obtained from a third-party app in 2014 after learning the information did not adhere to data protection rules.
But further allegations about the firm’s tactics piled up on Monday, as Britain’s Channel 4 News published video of Cambridge Analytica executives talking about using bribes, former spies and Ukrainian sex workers to entrap politicians.
Facebook was already facing calls on Saturday for regulation from US Congress and questions about personal data safeguards after reports in the New York Times and London’s Observer over the weekend.
On Monday, Republican Senator John Kennedy called on Mr Zuckerberg to testify before Congress, and Democratic Senator Ron Wyden sent a letter to to the Facebook founder asking about company policies for sharing user data with third parties.
Facebook usually sends lawyers to testify to Congress, or allows trade organisations to represent it and other technology companies in front of lawmakers.
Facebook and rivals including Twitter Inc and Alphabet Inc’s YouTube have taken voluntary steps to restrict possible foreign interference and combat false news, but they have not been forced by law or regulation to make changes and legislation on the issue has stalled.