Facebook Shares Plunge After Data-Sharing Expose

Facebook CEO Mark Zuckerberg Press conference at the summit G8/G20 about new technologies

Facebook, Inc. (NASDAQ: FB)

Facebook had a rough day on Wall Street, going down $7.43, or 5.17% to $136.23 in afternoon trading after The New York Times published a report saying the company shared personal data with 150 companies.

According to the report, Facebook offered users’ data to some of the largest companies in the world including Amazon.com Inc., Microsoft Corp. and Netflix Inc, Spotify Ltd., Yandex Inc., and Apple Inc.

NYT published a 4,000-word article exposing how the Nasdaq-listed social media giant provided the companies access to personal data. The newspaper said internal Facebook documents and hundreds of interviews gave insights into the company’s data-sharing agreements.

Royal Bank of Canada, Spotify, and Netflix allegedly had the ability to read and delete people’s personal messages, while Amazon was able to obtain contact information. Yahoo viewed streams of friends’ posts, while Bing which is owned by Microsoft, was permitted to see the names of all Facebook users’ friends. Among the companies that could extract Facebook users’ personal information to grow their own social media apps include Huawei and Blackberry.

The film review platform Rotten Tomatoes and music-streaming service Pandora were allowed to access friends’ data in order to customize their results. Apple gadgets had access to the calendar entries and contact numbers of users even if they had deactivated all sharing in the settings of their Facebook accounts.

The expose follows a series of scandals that have hit Facebook this year, including the incitement to violence in Myanmar, the Cambridge Analytica data harvest, as well as evidence of Iranian and Russian meddling in the U.S. 2016 election. The company is even facing a lawsuit filed by the attorney general for the District of Columbia, Karl Racine, for enabling Cambridge Analytica to access personal information of millions of its users.

Filing the lawsuit on Wednesday, Racine said in a statement: “Facebook failed to protect the privacy of its users and deceived them about who had access to their data and how it was used,” Mr. Racine said in a statement.

Facebook has since responded by saying, “We’re reviewing the complaint and look forward to continuing our discussions with attorneys general in D.C. and elsewhere.” The Mark Zuckerberg-led firm also denied NYT’s report that it gave companies access to personal user information.

In a blog post published on Wednesday, the Menlo Park-based company said, “Today, we’re facing questions about whether Facebook gave large tech companies access to people’s information. To be clear: none of these partnerships or features gave companies access to information without people’s permission, nor did they violate our 2012 settlement with the FTC.”

Steve Satterfield, director of privacy and public policy at Facebook also said that none of the partnerships infringed its agreement with the Federal Trade Commission or users’ privacy. He however admitted, “We know we’ve got work to do to regain people’s trust. Protecting people’s information requires stronger teams, better technology and clearer policies, and that’s where we’ve been focused for most of 2018.”