Facebook is facing another privacy nightmare, after The New York Times exposed the improper use of user data by Cambridge Analytica. In response to the story, Facebook admitted that the firm had improper access to the data and announced that it had hired a forensic team to investigate more fully.
Facebook Reacts to Cambridge Analytica Breach
Cambridge Analytica is a firm that researches the politics on the internet and looks for ways to use that information for its own marketing strategies. The breach they committed in accessing the user data of Facebook users has prompted new concerns of the social networking giant’s security measures. In response, Facebook has hired Stroz Friedberg, a digital forensics firm to look into the breach.
According to Facebook, Cambridge Analytica is complying with the investigation. The political research company has reportedly granted Stroz Friedberg to their servers and to their system software.
Facebook has also gone to the creators of the program used by Cambridge Analytica. Christopher Wylie and Aleksandr Kogan of Cambridge University developed the software together that makes it possible to collect data from online users. They later sold the application to Cambridge Analytica.
Kogan, who is a professor at the university, agreed to cooperate with the investigation. However, Wylie, known as a whistle-blower and the one responsible for developing the system for data collection, has declined.
Facebook Loses the Trust of Stockholders
Unsurprisingly, Facebook’s stock has dropped in the wake of this latest privacy scandal. On Monday, the company’s stock price dropped from $185.09 to $172.56, showing an 11.4% decrease. The stock again dropped between yesterday’s closing and today’s opening, falling to $164.07, which represents a 4.9% drop.
The news over Facebook’s privacy failures has also had broader implications for the tech industry at large. Both the Dow Jones and NASDAQ fell sharply, as worries over new regulations infected the markets. Traders on the floor were sent into a dovetail, as rumors stirred, causing a mass selling of stocks.
As for the breach that opened this financial can of worms, Facebook is pinning their hopes to the belief that Cambridge Analytica has not saved the user data they collected. If it still exists within the system, Facebook said that would be a violation of the social media network’s terms and conditions. Additionally, a statement from Facebook added that it would also be a violation of the trust Facebook placed on Cambridge Analytica.