Facebook Inc. (NASDAQ:FB) stock continued to drop as it was down 2% in early afternoon trading on March 22. Shares are down almost 10% week over week in the aftermath of the biggest scandal the company has faced in its history. News broke late last week that Cambridge Analytica, a London-based data services company, had harvested millions of Facebook profiles in order to gather data ahead of the 2016 U.S. election.
This is not the first time a major campaign has used this strategy in the U.S. In 2012 the Obama campaign encouraged supporters to download its Facebook app which permitted the campaign to collect data on users and their friends. However, in this case, the application was more transparent in its acknowledgement that it was collecting user data to aid the campaign. The app used by Cambridge Analytica which was downloaded by more than 270,000 people, on the other hand, stated that it was using the data for “academic purposes”.
Facebook CEO Mark Zuckerberg has publicly apologized for the data scandal and has said that his team has already corrected the issue going forward. However, this may not be sufficient going forward. There are now loud voices calling for a more intense crackdown on regulation of social media giants in North America. Facebook has been in a long battle to ease perceptions that its platform was used by a number of third parties to influence elections in the United States, as well as the Brexit campaign in the United Kingdom.
Like other tech companies, Facebook is facing real challenges going forward from regulators and changing public attitudes.
