Facebook [NASDAQ:FB] shares have dropped by about 10% since Monday the 19th March. They’re currently trading at US $166.49, down from $185.09 from Friday’s close.
On Monday US time, Facebook experienced its largest one-day decline in the last two years.
Why the Facebook share price decline?
The current drop is due to a privacy failure by the tech giant. It’s surfaced that Cambridge Analytica — a consulting firm used by the Donald Trump campaign — gathered data without permission from more than 50 million Facebook users.
Facebook has stressed that the incident was neither a breach of data nor a ‘hack’, insisting that the data itself was used incorrectly by Cambridge.
Cambridge was not supposed to receive the data in the first place. It was illegally passed on by psychology professor, Dr Aleksandr Kogan, in 2015.
According to Facebook, the firm said they deleted the data when asked to by Facebook — only for Facebook to receive information recently that the destruction hadn’t occurred.
On Friday, Facebook stated on its website that they are suspending Strategic Communication Laboratories, including their political data analytics firm, Cambridge Analytica, from their site.
What’s next for Facebook?
The tech company has stated that they are committed to protecting peoples’ information and enforcing their policies. And will do whatever is necessary to hold Cambridge Analytica accountable for their actions.
Moving forward, Facebook will continue working to improve the safety and user experience of the site.
Dannielle Rawlings, Kris Sayce,
For Money Morning Publisher, Money Morning
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