Facebook shares drop as Cambridge Analytica data privacy fallout spreads
WASHINGTON: Facebook Inc shares sank on Wednesday as concerns about its ability to safeguard user data sparked a government lawsuit, criticism in the US Congress and a New York Times report on how it had shared data with other companies.
The stock of the world`s largest social media company fell 7.25 per cent, its biggest intraday drop since July, taking losses for the year to about 24 per cent. Investors are concerned about snowballing legal and regulatory efforts over data use polices that have upset many customers and could carry significant penalties and costs.
In particular, the Silicon Valley firm has drawn global scrutiny since disclosing earlier this year that a third-party personality quiz distributed on Facebook gathered profile information on 87 million users worldwide and sold the data to British political consulting firm Cambridge Analytica.
Washington, DC, Attorney General Karl Racine said the US capital city was suing Facebook, accusing it of misleading users because it had known about the incident for two years before disclosing it.
It further alleges Facebook misled users by allowing several app makers it called partners “to override Facebook consumers` privacy settings and access their information without their knowledge or consent.” (agencies)