Facebook shares slide after reports of data misuse
0:02
2:07
Market update: US stocks slide as Facebook leads the tech sector lower
Video Link
By Munsif Vengattil
(Reuters) - Facebook Inc’s shares fell more than 4 percent in premarket trading after media reports that a political consultancy that worked on President Donald Trump's campaign gained inappropriate access to data on 50 million Facebook users.
The move would knock $23.8 billion off the social network’s market value of $538 billion as of Friday's close and shares in other social media companies including Twitter Inc and Snap Inc also dipped in early deals in New York.
One Wall Street analyst said the reports raised ‘ ystemic problems' with Facebook's business model and a number said it could spur far deeper regulatory scrutiny of the platform.
The head of European Parliament said on Monday that EU lawmakers will investigate whether the data misuse has taken place, adding the allegation is an unacceptable violation of citizens’ privacy rights.
Facebook was already facing new calls for regulation from U.S. Congress and questions about personal data safeguards after the reports from the New York Times and London’s Observer over the weekend.
For more news videos visit Yahoo View.
The papers reported on Saturday that private information from more than 50 million Facebook users improperly ended up in the hands of data analytics firm Cambridge Analytica, and that the information had not been deleted despite Facebook demands dating back to 2015.
“We think this episode is another indication of systemic problems at Facebook," said Brian Wieser, analyst at New York-based brokerage Pivotal Research Group, which already has a "sell" rating on a stock that rose 60 percent last year.
Wieser argued that regulatory risks for the company would intensify and enhanced use of data in advertising would be at greater risk than before.
He added, however, that it was unlikely to have a meaningful impact on the company’s business for now, with advertisers unlikely to "suddenly change the trajectory of their spending growth on the platform".
“This episode appears likely to create another and potentially more serious public relations 'black eye' for the company and could lead to additional regulatory scrutiny," said Peter Stabler, analyst at Wells Fargo.
The losses would be Facebook's biggest daily fall since a broader market pullback in February. In January, when Facebook announced changes to its newsfeed which it said would hit user engagement in the near term, shares fell 4.5 percent in one day.
“It's clear with more 'heat in the kitchen from the Beltway' that further modest changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months," said Daniel Ives, research analyst at GBH Insights.
He also argued that the issue was “ ackground noise" on which Facebook could calm any regulatory nerves through further investments in security, ad content AI, improved content algorithms and screening mechanisms.
No analysts had so far changed their price targets or recommendations on Facebook in response to the reports. Wall Street is largely bullish on the stock with 40 of 44 analysts recommending the stock “buy" or higher.
Shares of the company were down 4.4 percent at $177.90 by 09.13 a.m. ET.
(Reporting by Munsif Vengattil in Bengaluru; editing by Patrick Graham)
More news on FB.
Facebook Plunges as Pressure Mounts on Zuckerberg Over Data
[color=var(--body-font-color)]More stories by Sarah FrierMarch 19, 2018, 3:39 PM EDT[/color]
Facebook Inc. shares posted their steepest drop since 2015 as U.S. and European officials demanded answers to reports that a political advertising firm retained information on millions of the social network’s users without their consent.
Politicians on both sides of the Atlantic are calling on Chief Executive Officer Mark Zuckerberg to appear before lawmakers to explain how U.K.-based Cambridge Analytica, the data-analysis firm that helped Donald Trump win the U.S. presidency, was able to harvest the personal information.
Facebook has already testified about how its platform was used by Russian propagandists ahead of the 2016 election, but the company never put Zuckerberg himself in the spotlight with government leaders. The pressure may also foreshadow tougher regulation for the social network.
U.S. Senators Amy Klobuchar, a Democrat from Minnesota, and John Kennedy, a Republican from Louisiana, have called on the chairman of the Judiciary Committee to bring in technology company CEOs, including from Twitter Inc. and Alphabet Inc.’s Google, for public questioning.
In a letter Monday to Senator Chuck Grassley, a Republican from Iowa, Klobuchar and Kennedy said they have “serious concern regarding recent reports that data from millions of American was misused in order to influence voters.”
“The lack of oversight on how data is stored and how political advertisements are sold raises concerns about the integrity of American elections as well as privacy rights,” the senators wrote. A hearing with the CEOs would allow the committee to learn “what is being done to protect Americans’ data and limit abuse of the platforms, as well as to assess what measures should be taken before the next elections.”
[color=rgba(0, 0, 0, 0.65098)][img=789x0]https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ikVvDlTEWwBU/v2/1400x-1.png[/img][/color]
Facebook on Friday said that a professor used Facebook’s log-in tools to get people to sign up for what he claimed was a personality-analysis app he had designed for academic purposes. To take the quiz, 270,000 people gave the app permission to access data via Facebook on themselves and their friends, exposing a network of 50 million people, according to the New York Times. That kind of access was allowed per Facebook’s rules at the time. Afterward, the professor violated Facebook’s terms when he passed along that data to Cambridge Analytica.
Facebook fell as much as 8.1 percent to $170.06 on Monday in New York, wiping out all of the year’s gains so far. That marked the biggest intraday drop since August 2015.
Zuckerberg’s Fortune Falls $3.8 Billion Over Data Exploitation
Facebook found out about the breach in 2015, shut down the professor’s access and asked Cambridge Analytica to certify that it had deleted the user data. Yet the social network on Friday suspended Cambridge from its system, explaining that it had learned the information wasn’t erased. Cambridge, originally funded by conservative political donor Robert Mercer, on Saturday denied that it still had access to the user data, and said it was working with Facebook on a solution. On Monday, Facebook said Cambridge has agreed to a forensic audit of its servers and systems to determine whether the data was retained.
A researcher who worked with the professor on the app is now currently an employee at Facebook, which is reviewing whether he knew about the data leak.
The denials and internal inquiries did little to ease the criticism. Damian Collins, a British lawmaker, said Sunday that Zuckerberg or another senior executive should appear in front of his committee because previous witnesses have avoided difficult questions, creating “a false reassurance that Facebook’s stated policies are always robust and effectively policed.’’ He added in an interview on British radio Monday that Zuckerberg should “ top hiding behind his Facebook page and actually come out and answer questions about his company.”
The next few weeks represent a critical time for Facebook to reassure users and regulators about its content standards and platform security, to prevent rules that could impact its main advertising business, according to Daniel Ives, an analyst at GBH Insights.
“Changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months,” Ives wrote in a note to investors.
Facebook, meanwhile, has sought to explain that the mishandling of user data was out of its hands and doesn’t constitute a “breach” – a definition that would require the company to alert users about whether their information was taken, per U.S. Federal Trade Commission rules.
For more on Facebook, check out the Decrypted podcast:
Menlo Park, California-based Facebook no longer allows app developers to ask for access to data on users’ friends. But the improper handling of the data raises systemic questions about how much companies can be trusted to protect personal information, said Nuala O’Connor, president and CEO of the Center for Democracy & Technology.
“While the misuse of data is not new, what we now see is how seemingly insignificant information about individuals can be used to decide what information they see and influence viewpoints in profound ways,” O’Connor said in a statement. “Communications technologies have become an essential part of our daily lives, but if we are unable to have control of our data, these technologies control us. For our democracy to thrive, this cannot continue.”
Yet another story on abuse of FB personal information, people beware of this stuff.
How It works somewhat explained, too.
Obama’s Former Campaign Director Makes Bombshell Claim: Facebook Was "On Our Side"
The recent controversy and escalating scandal over Facebook’s decision to ban Trump-linked political data firm Cambridge Analytica over the use of data harvested through a personality app under the guise of academic research has opened a veritable Pandora's box of scandal for the Silicon Valley social media giant.
Carol Davidsen, who served as Obama’s director of integration and media analytics during his 2012 campaign (in her LinkedIn profile she says she was responsible for
“The Optimizer" & "Narwhal" big data analytics platforms), claims - with evidence, that Facebook found out about a massive data-mining operation they were conducting to "suck out the whole social graph" in order to target potential voters.
After Facebook found out, they knowingly allowed them to continue doing it because they were supportive of the campaign.
"[M]ore than 1 million Obama backers who signed up for the [Facebook-based app] gave the campaign permission to look at their Facebook friend lists. In an instant, the campaign had a way to see the hidden young voters.
Roughly 85% of those without a listed phone number could be found in the uploaded friend lists. What’s more, Facebook offered an ideal way to reach them,” reads an article Davidsen posted as a prelude to her postings.
In a series of Sunday night tweets, Davidsen explained how the Obama campaign was able to use Facebook data to "append to our email lists."
When Facebook found out about the data mining for political purposes - the same thing they just banned Cambridge Analytica for doing, they "didn't stop us."
Facebook even "came to office in the days following election recruiting & were very candid that they allowed us to do things they wouldn't have allowed someone else to do because they were on our side."
So - it seems that Facebook has selective standards when it comes to their data collection policy.
Cambridge Analytica bought data harvested using a personality app called "thisisyourdigitallife," created by two psychology professors. When CA was asked to stop and delete all of the harvested data, they did - however Facebook banned Cambridge Analytics and their parent company SCL after an anonymous source which Facebook won’t disclose reported that not all of the data had been deleted.
So the 2012 Obama campaign was scraping data from Facebook, got caught, and was specifically told they were allowed to do things “ hey wouldn't have allowed someone else to do because they were on our side."
Davidsen then tweeted "I am also 100% positive that Facebook activity recruits and staffs people that are on the other side."
Funny she should say that!
Turns out one of the two founding directors of Global Science Research (GSR), which sold the data to Cambridge Analytics, is employed by Facebook!
And as the broader public has merely scratched the surface of the tangled webs politicized social media platforms weave, Facebook's Chief Security Officer has already decided to get the hell out of dodge. One can only imagine what some real digging would unveil.
0:02
2:07
Market update: US stocks slide as Facebook leads the tech sector lower
Video Link
By Munsif Vengattil
(Reuters) - Facebook Inc’s shares fell more than 4 percent in premarket trading after media reports that a political consultancy that worked on President Donald Trump's campaign gained inappropriate access to data on 50 million Facebook users.
The move would knock $23.8 billion off the social network’s market value of $538 billion as of Friday's close and shares in other social media companies including Twitter Inc and Snap Inc also dipped in early deals in New York.
One Wall Street analyst said the reports raised ‘ ystemic problems' with Facebook's business model and a number said it could spur far deeper regulatory scrutiny of the platform.
The head of European Parliament said on Monday that EU lawmakers will investigate whether the data misuse has taken place, adding the allegation is an unacceptable violation of citizens’ privacy rights.
Facebook was already facing new calls for regulation from U.S. Congress and questions about personal data safeguards after the reports from the New York Times and London’s Observer over the weekend.
For more news videos visit Yahoo View.
The papers reported on Saturday that private information from more than 50 million Facebook users improperly ended up in the hands of data analytics firm Cambridge Analytica, and that the information had not been deleted despite Facebook demands dating back to 2015.
“We think this episode is another indication of systemic problems at Facebook," said Brian Wieser, analyst at New York-based brokerage Pivotal Research Group, which already has a "sell" rating on a stock that rose 60 percent last year.
Wieser argued that regulatory risks for the company would intensify and enhanced use of data in advertising would be at greater risk than before.
He added, however, that it was unlikely to have a meaningful impact on the company’s business for now, with advertisers unlikely to "suddenly change the trajectory of their spending growth on the platform".
“This episode appears likely to create another and potentially more serious public relations 'black eye' for the company and could lead to additional regulatory scrutiny," said Peter Stabler, analyst at Wells Fargo.
The losses would be Facebook's biggest daily fall since a broader market pullback in February. In January, when Facebook announced changes to its newsfeed which it said would hit user engagement in the near term, shares fell 4.5 percent in one day.
“It's clear with more 'heat in the kitchen from the Beltway' that further modest changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months," said Daniel Ives, research analyst at GBH Insights.
He also argued that the issue was “ ackground noise" on which Facebook could calm any regulatory nerves through further investments in security, ad content AI, improved content algorithms and screening mechanisms.
No analysts had so far changed their price targets or recommendations on Facebook in response to the reports. Wall Street is largely bullish on the stock with 40 of 44 analysts recommending the stock “buy" or higher.
Shares of the company were down 4.4 percent at $177.90 by 09.13 a.m. ET.
(Reporting by Munsif Vengattil in Bengaluru; editing by Patrick Graham)
More news on FB.
Facebook Plunges as Pressure Mounts on Zuckerberg Over Data
[color=var(--body-font-color)]More stories by Sarah FrierMarch 19, 2018, 3:39 PM EDT[/color]
Facebook Inc. shares posted their steepest drop since 2015 as U.S. and European officials demanded answers to reports that a political advertising firm retained information on millions of the social network’s users without their consent.
Politicians on both sides of the Atlantic are calling on Chief Executive Officer Mark Zuckerberg to appear before lawmakers to explain how U.K.-based Cambridge Analytica, the data-analysis firm that helped Donald Trump win the U.S. presidency, was able to harvest the personal information.
Facebook has already testified about how its platform was used by Russian propagandists ahead of the 2016 election, but the company never put Zuckerberg himself in the spotlight with government leaders. The pressure may also foreshadow tougher regulation for the social network.
U.S. Senators Amy Klobuchar, a Democrat from Minnesota, and John Kennedy, a Republican from Louisiana, have called on the chairman of the Judiciary Committee to bring in technology company CEOs, including from Twitter Inc. and Alphabet Inc.’s Google, for public questioning.
In a letter Monday to Senator Chuck Grassley, a Republican from Iowa, Klobuchar and Kennedy said they have “serious concern regarding recent reports that data from millions of American was misused in order to influence voters.”
“The lack of oversight on how data is stored and how political advertisements are sold raises concerns about the integrity of American elections as well as privacy rights,” the senators wrote. A hearing with the CEOs would allow the committee to learn “what is being done to protect Americans’ data and limit abuse of the platforms, as well as to assess what measures should be taken before the next elections.”
[color=rgba(0, 0, 0, 0.65098)][img=789x0]https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ikVvDlTEWwBU/v2/1400x-1.png[/img][/color]
Facebook on Friday said that a professor used Facebook’s log-in tools to get people to sign up for what he claimed was a personality-analysis app he had designed for academic purposes. To take the quiz, 270,000 people gave the app permission to access data via Facebook on themselves and their friends, exposing a network of 50 million people, according to the New York Times. That kind of access was allowed per Facebook’s rules at the time. Afterward, the professor violated Facebook’s terms when he passed along that data to Cambridge Analytica.
Facebook fell as much as 8.1 percent to $170.06 on Monday in New York, wiping out all of the year’s gains so far. That marked the biggest intraday drop since August 2015.
Zuckerberg’s Fortune Falls $3.8 Billion Over Data Exploitation
Facebook found out about the breach in 2015, shut down the professor’s access and asked Cambridge Analytica to certify that it had deleted the user data. Yet the social network on Friday suspended Cambridge from its system, explaining that it had learned the information wasn’t erased. Cambridge, originally funded by conservative political donor Robert Mercer, on Saturday denied that it still had access to the user data, and said it was working with Facebook on a solution. On Monday, Facebook said Cambridge has agreed to a forensic audit of its servers and systems to determine whether the data was retained.
A researcher who worked with the professor on the app is now currently an employee at Facebook, which is reviewing whether he knew about the data leak.
The denials and internal inquiries did little to ease the criticism. Damian Collins, a British lawmaker, said Sunday that Zuckerberg or another senior executive should appear in front of his committee because previous witnesses have avoided difficult questions, creating “a false reassurance that Facebook’s stated policies are always robust and effectively policed.’’ He added in an interview on British radio Monday that Zuckerberg should “ top hiding behind his Facebook page and actually come out and answer questions about his company.”
The next few weeks represent a critical time for Facebook to reassure users and regulators about its content standards and platform security, to prevent rules that could impact its main advertising business, according to Daniel Ives, an analyst at GBH Insights.
“Changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months,” Ives wrote in a note to investors.
Facebook, meanwhile, has sought to explain that the mishandling of user data was out of its hands and doesn’t constitute a “breach” – a definition that would require the company to alert users about whether their information was taken, per U.S. Federal Trade Commission rules.
For more on Facebook, check out the Decrypted podcast:
Menlo Park, California-based Facebook no longer allows app developers to ask for access to data on users’ friends. But the improper handling of the data raises systemic questions about how much companies can be trusted to protect personal information, said Nuala O’Connor, president and CEO of the Center for Democracy & Technology.
“While the misuse of data is not new, what we now see is how seemingly insignificant information about individuals can be used to decide what information they see and influence viewpoints in profound ways,” O’Connor said in a statement. “Communications technologies have become an essential part of our daily lives, but if we are unable to have control of our data, these technologies control us. For our democracy to thrive, this cannot continue.”
Yet another story on abuse of FB personal information, people beware of this stuff.
How It works somewhat explained, too.
Obama’s Former Campaign Director Makes Bombshell Claim: Facebook Was "On Our Side"
The recent controversy and escalating scandal over Facebook’s decision to ban Trump-linked political data firm Cambridge Analytica over the use of data harvested through a personality app under the guise of academic research has opened a veritable Pandora's box of scandal for the Silicon Valley social media giant.
Carol Davidsen, who served as Obama’s director of integration and media analytics during his 2012 campaign (in her LinkedIn profile she says she was responsible for
“The Optimizer" & "Narwhal" big data analytics platforms), claims - with evidence, that Facebook found out about a massive data-mining operation they were conducting to "suck out the whole social graph" in order to target potential voters.
After Facebook found out, they knowingly allowed them to continue doing it because they were supportive of the campaign.
"[M]ore than 1 million Obama backers who signed up for the [Facebook-based app] gave the campaign permission to look at their Facebook friend lists. In an instant, the campaign had a way to see the hidden young voters.
Roughly 85% of those without a listed phone number could be found in the uploaded friend lists. What’s more, Facebook offered an ideal way to reach them,” reads an article Davidsen posted as a prelude to her postings.
In a series of Sunday night tweets, Davidsen explained how the Obama campaign was able to use Facebook data to "append to our email lists."
When Facebook found out about the data mining for political purposes - the same thing they just banned Cambridge Analytica for doing, they "didn't stop us."
Facebook even "came to office in the days following election recruiting & were very candid that they allowed us to do things they wouldn't have allowed someone else to do because they were on our side."
So - it seems that Facebook has selective standards when it comes to their data collection policy.
Cambridge Analytica bought data harvested using a personality app called "thisisyourdigitallife," created by two psychology professors. When CA was asked to stop and delete all of the harvested data, they did - however Facebook banned Cambridge Analytics and their parent company SCL after an anonymous source which Facebook won’t disclose reported that not all of the data had been deleted.
So the 2012 Obama campaign was scraping data from Facebook, got caught, and was specifically told they were allowed to do things “ hey wouldn't have allowed someone else to do because they were on our side."
Davidsen then tweeted "I am also 100% positive that Facebook activity recruits and staffs people that are on the other side."
Funny she should say that!
Turns out one of the two founding directors of Global Science Research (GSR), which sold the data to Cambridge Analytics, is employed by Facebook!
Quote:[color=rgba(0, 0, 0, 0.65098)]Joseph Chancellor was one of two founding directors of Global Science Research (GSR), the company that harvested Facebook data using a personality app under the guise of academic research and later shared the data with Cambridge Analytica.
He was hired to work at Facebook as a quantitative social psychologist around November 2015, roughly two months after leaving GSR, which had by then acquired data on millions of Facebook users.
Chancellor is still working as a researcher at Facebook’s Menlo Park headquarters in California, where psychologists frequently conduct research and experiments using the company’s vast trove of data on more than 2 billion users. -[i]The Guardian.[/i][/color]
And as the broader public has merely scratched the surface of the tangled webs politicized social media platforms weave, Facebook's Chief Security Officer has already decided to get the hell out of dodge. One can only imagine what some real digging would unveil.