Shares in Facebook (US:FB) suffered their worst fall in four years following claims that it had been used to harvest personal data in the run up to the US presidential election. The social media giant lost $36.7bn (£26.1bn) of its market capitalisation in one day, while its peers including Twitter (US:TWTR), Snap (US:SNAP) and Google-owner Alphabet (US:GOOGL) stumbled amid fears that these allegations may lead to a regulatory clamp down in the US tech space.
And it appears that investors are right to be concerned. Following the reports that Cambridge Analytica – a British data analysis company employed by Donald Trump’s presidential campaign – mined the personal data of 50m Facebook users to create profiles to target them in elections, regulators in the UK, US and Europe have launched investigations into the security of personal data on global tech platforms. Meanwhile, Mark Zuckerberg – Facebook’s founder and chief executive – has been summoned to appear in front of a parliamentary committee to give evidence about the use of personal data by Cambridge Analytica.
It throws a spanner in the works of Mr Zuckerberg’s plans to reinvigorate the image of Facebook in 2018, following last year’s accusations that its newsfeed helped Russia meddle in the US presidential election. In fact, the hashtag 'DeleteFacebook' was trending on Twitter as consumers panicked that their personal information was not being protected well enough by the social media giant.
Whistle-blower Christopher Wylie claims Facebook failed to ensure that all the data – which was collected in 2014 – was deleted. He also alleges that the data was harvested without the explicit consent of Facebook users, owing to a loop-hole in the platform’s security measures at the time.
Facebook said when it learned its rules had been breached, it removed the app that was gathering data and demanded assurances that the information had been deleted. Cambridge Analytica denies any of the data was used as part of the services it provided to the Trump campaign.
But even if all the allegations do prove false, the questions surrounding the regulation of tech platforms remain. Europe may be overhauling its data protection laws in May, but does the new regulation really go far enough? Perhaps it’s time for antitrust regulators to stop focusing on protecting the consumer purse, and defend identities instead.
