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Facebook shares closed down nearly 7.0 per cent on Monday, wiping nearly $40 billion off its market value as investors worried that new legislation could damage the company’s advertising business.
TheNewsGuru reports Facebook CEO Mark Zuckerberg has been under pressure after privacy regulators launched a probe into how the social media giant handles users’ data following reports that Facebook lost control of more than 50 million user profiles to Cambridge Analytica.
The criticism of Cambridge Analytica presents a new threat to Facebook’s reputation, which is already under attack over Russia’s alleged use of Facebook tools to sway U.S. voters with divisive and false news posts before and after the 2016 election.
“The lid is being opened on the black box of Facebook data practices, and the picture is not pretty,” said Frank Pasquale, a University of Maryland law professor who has written about Silicon Valley’s use of data.
On Monday, Facebook said it had hired forensic auditors from the firm Stroz Friedberg to investigate and determine whether Cambridge Analytica still had the data in order to arrest further decline of its market value.
“Auditors from Stroz Friedberg were on site at Cambridge Analytica’s London office this evening,” the company said in a statement late Monday.
“At the request of the UK Information Commissioner’s Office, which has announced it is pursuing a warrant to conduct its own on-site investigation, the Stroz Friedberg auditors stood down,” Facebook said.
However, the London-based Cambridge Analytica has denied the media claims, stressing it deleted all Facebook data it obtained from a third-party application in 2014 after learning the information did not adhere to data protection rules.
However, further allegations about the firm’s tactics were reported late Monday by British broadcaster Channel 4 which said it secretly taped interviews with senior Cambridge Analytica executives in which they boasted of their ability to sway elections in countries around the world with digital manipulation and traditional political trickery.
Cambridge Analytica rejected the allegations, saying in a statement that the Channel 4 report “is edited and scripted to grossly misrepresent the nature of those conversations and how the company conducts its business.”