Wall Street has taken its first opportunity to weigh in on the fallout from the Cambridge Analytica revelation with Facebook falling on Monday morning.
The social network was down more than 5.5 percent to $175 a share in early morning trading.
The drop, if sustained through the market’s close, would be Facebook’s biggest dip in more than a year.
Facebook suspended data analytics firm Cambridge Analytica for covertly harvesting information from more than 50 million profiles. The New York Times reported on Saturday that the data was purchased to aid President Trump’s 2016 campaign.
According to the Times, ahead of the 2014 midterm elections, Cambridge Analytica received a $15 million investment from Republican donor Robert Mercer, and “wooed” Mercer political adviser Steve Bannon, better known Donald Trump’s former chief White House strategist and the ex-executive chairman of Breitbart News.
The company then paid University of Cambridge psychology professor Dr. Aleksandr Kogan for Facebook user data he had collected through an app. Sharing such information is a violation of the social media website’s policy.
Kogan’s “thisisyourdigitallife” app, which was downloaded by approximately 270,000 Facebook members, was billed as “a research app used by psychologists,” and offered users a personality prediction. In doing so, users gave consent for the app to access information about their location, content they liked, and what Mark Zuckerberg’s company qualified as some “limited information” about friends without strict privacy settings.
Facebook said on Saturday that “Kogan lied to us” by passing data collected from his app to Cambridge Analytica. Facebook said that when it learned of the violation in 2015, it removed Kogan’s app. The company added it “demanded certifications from Kogan and all parties he had given data to that the information had been destroyed.”
CEO Mark Zuckerberg isn’t just feeling the heat from investors, either; American and British politicians are demanding the chief exec testify on how such a massive breach could take place.