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Facebook’s stock plummeted Monday after the social media company revealed that it had shared user data with a political analysis firm.
By noon Pacific Time, Facebook’s stock had tumbled nearly 7.5 percent. That presents a market capitalization loss of over $43 billion for the firm.
The controversy began when The New York Times and several publications in the UK revealed that political data analysis firm Cambridge Analytica had tried to influence how American citizens voted. Cambridge Analytica reportedly used data that it had obtained from about 50 million Facebook profiles.
Facebook originally gave permission to a University of Cambridge processor named Aleksandr Kogan to gather information about users who downloaded his personality test app. The app, “thisisyourdigitallife,” was allowed to harvest location data, friends lists and “liked” pages.
While that data collection was legitimate and abided by Facebook’s rules, The New York Times revealed that Kogan had shared that data with Cambridge Analytica without users’ consent — a breach of the social media platform’s Terms of Service. Facebook announced on Friday that it had suspended the data analytics firm.
Cambridge Analytica is partly owned by billionaire Robert Mercer. The firm also offered its services to the Trump Campaign in the 2016 U.S. presidential election. At the time, reports suggested that the firm promised to target voter’s “unconscious psychological biases” by creating deep personality profiles.
Former Cambridge Analytica employee Christopher Wylie called the firm’s work a “grossly unethical experiment,” and added that it had exploited Facebook to gather data on millions of users. Wylie told The Observer that Cambridge Analytica then “built models to exploit what we knew about them and target their inner demons.”
Facebook is now facing intense pressure from government bodies and other groups as it faces tough questions about its users’ privacy rights. Lawmakers in Europe and the U.S. have raised concerns about the data breach, while the European Union has promised an investigation into the matter.
Even before this incident, the social media company has faced controversy about its role in the recent election. Last year, Facebook admitted that Russian government-backed firms had run political ads on the platform which were seen by more than 10 million users.
Cambridge Analytica said in a statement that it has deleted the data and is currently working with Facebook to “resolve” the issue.