Facebook furor rages as apology fails to placate lawmakers, Wall St
WASHINGTON/LONDON — Facebook came under further pressure from lawmakers, investors, advertisers and users on Thursday, the day after its chief executive Mark Zuckerberg admitted the social media network made mistakes in letting 50 million users’ data get into the hands of political consultancy Cambridge Analytica.
US lawmakers demanded Zuckerberg personally testify in Washington to explain his company’s actions.
Meanwhile, advertisers Mozilla and Commerzbank suspended ads on the service and the hashtag #DeleteFacebook remained popular online, although it was hard to tell how many users are abandoning Facebook.
In light of those concerns, investors continued to sell off Facebook shares, although not at the pace of earlier in the week. They closed on Thursday at $164.89, down 2.7 percent. The S&P 500 Index was down 2.5 percent on the day. Facebook shares closed at $185.09 on March 16.
The company has seen over $50 billion wiped off its market value since allegations emerged this week that Cambridge Analytica improperly accessed data to build profiles on US voters and influence the 2016 presidential election.
Five days after the scandal broke, Zuckerberg apologized on Wednesday for mistakes his company made and promised to restrict developers’ access to user information as part of a plan to protect privacy.
On Thursday, Facebook executives were still saying sorry. “We know this is an issue of trust. We know this is a critical moment for our company, for the service we provide,” chief operating officer Sheryl Sandberg said in an interview broadcast on CNBC.
Zuckerberg’s apology and promises were not enough to ease political pressure on the largest social-media company.
“It shouldn’t be for a company to decide what is the appropriate balance between privacy and innovation and use of data. Those rules should be set by society as a whole and so by parliament,” said Britain’s Minister for Digital, Culture, Media and Sport, Matt Hancock.
Zuckerberg’s media rounds did little to satisfy Washington lawmakers in either political party who have demanded this week that the 33-year-old testify before Congress.
The Republican chairman and top Democrat of the US House Energy and Commerce Committee said they will formally ask Zuckerberg to testify in the coming days.
The request came a day after company executives briefed committee aides for two hours and left with a list of at least 60 questions they were unable to answer, two aides said.
Zuckerberg said in media interviews on Thursday he would be willing to testify if he is the right person at the company to speak to lawmakers.
Wall Street analysts expressed relief that there were no signs so far of a fundamental shift in the company’s advertising-driven revenue model, but some said there would be costs to shore up its reputation.
Facebook, with more than 2 billion monthly active users, made almost all its $40.6 billion in revenue last year from advertising.
Sandberg said Facebook’s priority was restoring users’ trust, even if that meant accepting regulation of the data that is central to its ad business, and added that the company was “massively ramping hiring”.
Technology stocks have fallen along with Facebook this week as investors worried about tighter scrutiny of global platforms like Alphabet’s Google, Twitter and Snapchat.