Home Security Facebook shares fall 5% after 'data breach' claims

Facebook shares fall 5% after 'data breach' claims

A 5% fall in the value of Facebook shares on Monday followed the exposure over the weekend of a leak of data from the social media giant that is claimed to have exposed details about more than 50 million users.

A note from Brian Wieser, an analyst at Pivotal Research, said that the reports highlighted the fact that Facebook did not make sufficient efforts to recover the leaked data that is then claimed to have helped the targeting of advertisements during the 2016 US presidential election, the website RT reported.

Stories in London's The Observer and The New York Times alleged that Facebook had suffered a "data breach", something that social media firm contested because the leak had taken place due to a feature in its software.

Nearly four years ago, a researcher collected the data using an app that requested people to take a personality test for academic research.

About 270,000 people took the test; its creator, Aleksandr Kogan, called the app he was using “a very standard vanilla Facebook app".

The app, however, also collected the data of friends of those who responded, due to the terms of service and Facebook's existing API.

Kogan later passed on the data to data research firm Cambridge Analytica, which worked for President Donald Trump’s election team.

The reports said what was handed over was information about more than 50 million people.

Wieser said: "We think this episode is another indication of systemic problems at Facebook … We see enhanced risks for the company, but no near-term tangible impact on its business."

He said Pivotal was recommending selling Facebook shares as they were likely to fall from US$185 to US$152.

"Regulators will take a tougher line on sharing data across Facebook's apps, especially including WhatsApp and the core Facebook platform," he added.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

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