NEW YORK – Facebook has lost around $64 billion in market value after a series of reports earlier this month showed a GOP-aligned analysis firm improperly accessed personal data from tens of millions of users, according to a report Tuesday from Axios.
Facebook is struggling to absorb criticism after the company suspended data analytics firm, Cambridge Analytica, for reportedly working with President Donald Trump’s campaign team to gather private information in the runup to the 2016 presidential election. Company CEO Mark Zuckerberg also became $5 billion poorer Monday afternoon as reports are taking their toll.
Facebook is faced by a crisis “that is going to destroy the company,” says Mark Zuckerberg’s erstwhile mentor, the venture capitalist Roger McNamee (@Moonalice). “They haven’t even taken the first step of admitting there’s a problem.” https://t.co/L6QCzQz0uQ
The multi-billion-dollar social media platform claims disbarment of the firm is necessary to ensure people’s information is protected and user data isn’t being manipulated. Reports about Facebook’s inability to address Cambridge Analytica’s activity could generate calls for new user privacy regulations.
Facebook allowed University of Cambridge psychology Prof. Aleksandr Kogan to develop an app to collect data on friends using features such as “likes.” The company inadvertently gave Kogan powers with unintended consequences, and upon figuring out his tactics and purposes, it barred the alleged violators. Kogan was reportedlyable to create more than 50 million profiles using the trend and characteristics data before providing them to Cambridge.
The company’s stock tumbled Monday by more than 8 percent after the U.K. and U.S. politicians criticized Zuckerberg for alleged data breaches that shared millions of users’ personal information. The data was reportedly used for political purposes during the 2016 election.
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