Facebook has lost $35 billion in market value following reports that Cambridge Analytica, a data firm that worked with President Donald Trump in the 2016 elections, had unauthorized access to 50 million Facebook user accounts in one of its largest breaches yet.
On Monday, shares of Facebook shed 6%—losing more than the value of Snapchat parent company Snap on even its best days—for a market capitalization of about $502.6 billion.
Spooked investors sold off shares of the social media firm following the investigation that found Cambridge Analytica obtained unauthorized access to some 50 million Facebook accounts in a bid to target users with more effective political messages. While the data came before the presidential elections, from 2014, according to New York Timesand the Observer of London investigation, it served as the foundation of Cambridge Analytica’s work with Trump two years later.
On the heels of the reports, lawmakers called for investigations and increased regulation into the sector, intensifying an already burning spotlight on social media companies. Since the elections, lawmakers have adopted a more aggressive approach toward Facebook, Twitter, and Alphabet over everything from potential behavioral manipulation to their role in showing Russian-backed ads during the 2016 elections.
With the threat of increased scrutiny of tech companies and how they manage their user information, Alphabet also shed nearly 4% or about $27.3 billion in value, for a capitalization of about $760.8 billion. That comes amid a selloff in tech stocks, in part flamed by plans from the European Union to tax tech firms by revenue rather than by profits. Tech stocks on Monday fell 2% as measured by the Nasdaq Composite. That represented a steeper loss than in the broader stock market as measured by the S&P 500, which shed roughly 1.4% in the same period.
Facebook, meanwhile, announced that Cambridge Analytica has been suspended from the platform.
Though the event has been characterized as a data “breach,” Facebook has claimed that the data was gained “through legitimate channels,” but misused by Cambridge Analytica. Facebook added that it had ordered for the data to be destroyed in 2015, though it later discovered that Cambridge Analytica had not deleted all the data. In fact, the Times reports, Cambridge still holds “most or all” of that data.
The explanation, however, didn’t appease U.S. lawmakers and U.K. legislators, who are now also calling for investigations.
Massachusetts Attorney General Maura Healy, for instance, announced an investigation via Twitter over the weekend.
#BREAKING: Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica. We are launching an investigation. https://t.co/wjqmHa6zjm
— AG Maura Healey Archived (@AGHealeyArchive) March 17, 2018
At the same time, Sen. Mark Warner (D-Va.) called for greater regulation over political ads.
He wrote on Twitter that “whether it’s allowing Russians to purchase political ads, or extensive micro-targeting based on ill-gotten user data, it’s clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency.”
