The Strategist

Facebook loses $5 bln thanks to data leak

03/20/2018 - 07:32

Shares of Facebook fell by more than 7% after reports that the British analytical company Cambridge Analytica illegally received personal data from social network users to compile psychological portraits of US voters, MarketWatch reports.
At the beginning of the trading session on the New York Stock Exchange, shares of Facebook fell by 6.03%, reaching $ 173.43. In total, they lost 7.81%, which was the strongest decline in the last four years.

As the publication notes, US and British lawmakers over the weekend have begun to investigate how Cambridge Analytica has access to personal data of tens of millions of users of the social network without their knowledge during the presidential election in 2016.

A few days ago, the New York Times published an article stating that information about 50 million users of the social network had leaked through Cambridge Analytica. This figure appeared on the basis of documents and stories of former employees, the newspaper notes. The data were used by analysts from Donald Trump's headquarters before the 2016 elections to "determine the personality traits of the American electorate and influence its behavior."

On Friday, Facebook said that it blocked Cambridge Analytica's access to the social network during the internal investigation. In addition, on Sunday, Facebook reported that it is conducting extensive internal and external investigation of the incident.

It turned out that Facebook employees Joseph Chancellor and Aleksandr Kogan created Global Science Research firm, which provided data to the Cambridge Analytica platform. The latter was closely connected with Trump's campaign headquarters. According to a number of foreign media, the firm has information about several tens of millions of accounts collected using an application for surveys called thisisyourdigitallife. The app was presented as the compiler of "psychological portraits".

The researchers had access to data on 50 million Facebook users, although only 270 thousand people were tested. Thanks to this, the researchers not only got an idea of the personalities of users, but also created a full-fledged profile of their beliefs, characteristics, preferences, interests, and much more. A former Cambridge Analytica employee, Christopher Wylie, who told reporters in detail about the scheme of the company, claims that he himself came up with a scheme for the "psychological weapons of Stephen Bannon" - this is how he calls the system of analyzing the personalities of users.

Later, Facebook reported that Kogan had allegedly not violated the confidentiality agreement, since users themselves agreed to process the data by registering in the application. Then, Facebook changed the attitude to the situation: the company’s lawyer called the actions of Cambridge Analytica fraud and promised to take every steps to make the British company completely remove the information.

Cambridge Analytica’s website says that the company is engaged in data analysis, including for political projects. In 2016 the application thisisyourdigitallife developed by the staff was blocked on Facebook, and the social network required to delete the information. However, a few days ago, the company's management learned that Cambridge Analytica had not fulfilled its promises. 

Information about the theft of data caused a great resonance. US lawmakers called on Zuckerberg to explain the actions of his company.


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