What began as an unseemly scandal for Cambridge Analytica is drifting into the realm of potential illegality. And since Facebook got involved, they have experienced huge problems. Recently, The FTC started officially investigating Facebook following the Cambridge Analytica privacy scandal. And reports have it that the recent decline of Facebook stocks may be partly as a result of this.
Cambridge Analytica Explained
Cambridge Analytica (CA) is a British political consulting firm. They combine data mining, data brokerage, and data analysis with strategic communication for the electoral process.
How Did It All Begin
In 2014, Facebook allowed Cambridge Analytica to collect user data. This has since been dubbed ‘The Facebook and Cambridge Analytica data breach’. Cambridge Analytica breached the data a collection of personally identifiable information of about 50 million Facebook users.
The data was used to influence voter opinion on behalf of politicians who hire them. Following the breach, Facebook apologized and experienced public outcry and lowered stock prices. They called the way that Cambridge Analytica collected the data inappropriately.
Trouble for Facebook?
The Federal Trade Commission confirmed on Monday that it has officially opened an investigation into Facebook following the company’s recent Cambridge Analytica privacy scandal.
It was known last week that the FTC had reached out to Facebook and was planning to send the company a list of questions about the Cambridge Analytica situation, but the agency never confirmed that Facebook was under official investigation until now.
Mark Zuckerberg has since spoken to CNN. He said, “This was a major breach of trust, and I’m really sorry that this happened. Our responsibility now is to make sure that this doesn’t happen again.”
Shares of Facebook cratered as much as 6 percent Monday after the Federal Trade Commission announced it is investigating the company’s data practices in the wake of the Cambridge Analytica leak of 50 million users’ information.
Facebook has since faced questions over its data handling. The questions follow reports that research firm Cambridge Analytica improperly gained access to the personal data of more than 50 million Facebook users.
Facebook’s stock shed more than 13 percent in the five days of trading following the initial reports.
Monday morning the stock briefly fell into the bear market territory, more than 20 percent off its 52-week high, before paring losses. By early afternoon it was down less than 2 percent.
In a recent post on his Facebook page, Mark Zuckerberg promised users that the issue would soon be revolved.