Facebook shares drop 7% due to the scandal with Cambridge Analytica - Hitecher
Facebook shares drop 7% due to the scandal with Cambridge Analytica

Facebook shares drop 7% due to the scandal with Cambridge Analytica

by James B. Hutcherson on

Business News

Facebook reputation is in danger again. After information about the leakage of users’ data shares of the company fell by more than 7%. This was the largest drop in FB quotes over the past four years.

According to investigations of The New York Times and The Guardian the British company Cambridge Analytica received personal data from 50 million Facebook users in 2014, bypassing the privacy policy of the social network.

Cambridge Analytica collaborated with Alexander Kogan, a professor of psychology at Cambridge University. Kogan developed a psychological test with monetary reward for its  participants. The project was positioned to be exclusively a research, but in fact the data was sold without the knowledge of users. Gathering information costed Cambridge Analytica 800 thousand dollars. The test involved only 270 thousand participants, but the privacy policy of Facebook allowed third-party programs to request information about friends of users since 2014. In this way Cambridge Analytica was able to obtain data on 50 million users and then created the most relevant ads based on their preferences.

The interesting thing is that Cambridge Analytica reports 25 years of market experience but the company appeared in 2013 only.

According to the investigations of American publications Cambridge Analytica cooperated with Donald Trump’s headquarters during his campaign in 2016 in order to influence voters opinion. The US Federal Electoral Commission invited Mark Zuckerberg and other Facebook technical managers to testify.

Facebook has banned Cambridge Analytica in the network after these scandalous publications. The journalists state that Facebook was informed about the leak but ignored it.

Facebook has recently changed its advertising policy to show that the interests of ordinary users are most important for the company. For example no more ads on ICO and cryptocurrencies are allowed on Facebook.

Now Facebook shares are $170 worth.


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