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.
Bloomberg reports that 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.”
A call led by AT&T to regulate Facebook for blatant discrimination against political conservatives has been gaining steam, and many are saying that Facebook should be defined as a “Digital Company Town”, which would expressly forbid them from hampering free speech of Facebook users.
Facebook has seen a 24% drop in overall usage of the social media platform since Mark Zuckerberg announced a crackdown on political views contrary to his own.
Facebook is facing an existential test, and its leadership is failing to address it, CNBC reports.
Good leaders admit mistakes, apologize quickly, show up where they’re needed and show their belief in the company by keeping skin in the game.
Facebook executives, in contrast, react to negative news with spin and attempts to bury it. Throughout the last year, every time bad news has broken, executives have downplayed its significance. Look at its public statements last year about how many people had seen Russian-bought election ads — first it was 10 million, then it was 126 million.
Top execs dodged Congress when it was asking questions about Russian interference. They are selling their shares at a record clip.
The actions of Facebook execs now recall how execs at Nokia and Blackberry reacted after the iPhone emerged. Their revenues kept growing for a couple years — and they dismissed the threats. By the time users started leaving in droves, it was too late.
There’s no outside attacker bringing Facebook down. It’s a circular firing squad that stems from the company’s fundamental business model of collecting data from users, and using that data to sell targeted ads. For years, users went along with the bargain. But after almost a year of constant negative publicity, their patience may be waning.
Facebook did not initially respond to questions or a request for comment from CNBC.
For more than a year now, Facebook has been deflecting stories about how its platform was used during the 2016 presidential election.
Some of this activity — like Facebook embedding workers with the Trump campaign to tell them how to advertise more effectively — was perfectly legal, and in line with normal business practices. A lot of these tactics would probably have drawn no scrutiny if Donald Trump hadn’t surprised everybody by winning an election that all the polls showed him losing.
Other activity was against Facebook’s policies, or outright illegal. Most notably, a U.S. grand jury recently indicted 13 Russian nationals for conducting a disinformation campaign on American soil intended to further political divisions in the country and sway the election toward Trump. Their tactics included using Facebook groups to organize divisive political protests and buying targeted ads.
CEO and founder Mark Zuckerberg has remained aloof throughout the whole sequence of events.
All of this on reports that show Facebook has fallen out of favor with the youngest generation of Americans, with youth being quoted as saying “Facebook is for old people”.
Mr Americana, Overpasses News Desk
March 19th, 2018