Facebook (NASDAQ: FB) stock significantly fell down due to some current political controversies of abusing on this social network during the last US presidential elections. The income has also continued to drop down, together with the stock price.
Facebook shares fell nearly 7% on Mar 19, and it was one of the biggest daily losses in the company’s history. The Observer of London and New York Times published details about a political research company that exploited sensitive data from this social network while worked for Donald Trump’s election campaign in 2016. Approximately 50 million users were affected by this unauthorized research and their data and details were taken over without their knowledge.
The company, Cambridge Analytica, manipulated with this information to identify voters subjected to persuasion while making sure they saw advertisements and other content related to Donald Trump’s campaign.
The nature of this unauthorized research is not new. It has been obvious for months that political workers of different parties flooded Facebook and other social networks with legitimate and bogus content in an attempt to influence the final outcome of the US presidential election in 2016.
Robert Mueller, a special prosecutor filed a court accusation explaining how Russian secret service agents used social-media networks to swing the US presidential election in Trump’s favor. Since Donald Trump won in 2016, Facebook stocks had moved up 49% until March 19.
However, investors definitely have big new troubles with Facebook. Key legislators in Europe and the United States are calling for new hearings about the subject, possibly moving to new rules. The Federal Trade Commision is checking whether Facebook broke a 2011 consent decree rule administering the user data privacy, with billions of dollars in penalties possible. “This might compromise the company’s business model,” said V.S Subrahmanian, a professor of cybersecurity and technology at Dartmouth University. “They should have resolved this issue a long time ago.”
Changing regulations might be a good way to improve this area and protect the user’s data significantly better than now. Honest Ads Act requires political advertisements to follow the same rules as those ads in print and broadcast media. On Facebook, it is possible to publish ads anonymously, while in traditional media, advertising publishers have to reveal their identity. So, the act demands the same rule should be applied to all media, including those online. That way, the possibility for open manipulation would be drastically lower, and all would know who stands behind every particular ad.