Facebook tumbled 7% on Monday, helping to pull the tech-heavy
Nasdaq 1.8% lower and S&P 500 1.4%. It was the Nasdaq’s worst day
since February 8.
The Dow fell as much as 493 points. The average closed down 336
points, or 1.4%, and is back in negative territory for the
Facebook is under pressure from lawmakers in both the United
States and the UK after more than 50 million users’ data ended up
in the hands of data firm Cambridge Analytica.
In the short run I always caution against reading anything into the market’s sense, but in this case I think investors are right. Facebook is in some serious trouble. This Cambridge Analytica scandal proves that Facebook ought to be heavily regulated, and that’s not good for Facebook’s bottom line.
I take issue, though, with the phrase “ended up in the hands of”. The implication with that phrasing is that Cambridge Analytica hoodwinked Facebook, or breached some sort of defenses. They didn’t. The information Cambridge Analytica obtained was exactly the information Facebook provides to advertisers by design. Cambridge Analytica just used that data in ways Facebook didn’t anticipate. Or perhaps better said, Facebook never anticipated that when people started to realize just what Facebook enables, there’d be outrage.
Apple’s public commitment to placing a high priority on privacy is looking better and better — both ethically and as a business decision.
★ Monday, 19 March 2018