LONDON (Reuters) - Britain is investigating whether Facebook did enough to protect data after a whistleblower said a London-based political consultancy hired by Donald Trump improperly accessed information on 50 million Facebook users to sway public opinion.
Facebook (FB.O) shares closed down nearly 7 percent on Monday, wiping nearly $40 billion off its market value as investors worried that damage to the reputation of the world’s largest social media network would deter users and advertisers.
Elizabeth Denham, the head of Britain’s Information Commission, is seeking a warrant to search the offices of consultancy Cambridge Analytica after a whistleblower revealed it had harvested the private information of millions of people to support Trump’s 2016 U.S. presidential campaign.
“We are looking at whether or not Facebook secured and safeguarded personal information on the platform and whether when they found out about the loss of the data they acted robustly and whether or not people were informed,” Denham told BBC Radio.
U.S. and European lawmakers have demanded an explanation of how the consulting firm gained access to the data in 2014 and why Facebook failed to inform its users, raising broader industry questions about consumer privacy.
In Washington, the Republican chairman of the Senate Commerce, Science and Transportation Committee sent a letter on Monday to Facebook CEO Mark Zuckerberg requesting information and a briefing on the Facebook user data.
“The possibility that Facebook has either not been transparent with consumers or has not been able to verify that third party app developers are transparent with consumers is troubling,” read the letter which was also addressed to Nigel Oakes, chief executive of Cambridge Analytica’s affiliate SCL.
Bloomberg reported that the U.S. Federal Trade Commission is investigating Facebook. Its shares fell a further 1.8 percent.
In London, the head of Britain’s cross-party Media parliamentary committee also wrote to Zuckerberg asking for more information. “We would like to receive your response by Monday 26 March,” lawmaker Damian Collins wrote.
In Dublin, Ireland’s privacy watchdog said it was following up with Facebook to clarify its oversight. The Irish body is the lead regulator for Facebook in the European Union because the network’s European headquarters are in Dublin.
Created in 2013, Cambridge Analytica markets itself as a source of consumer research, targeted advertising and other data-related services to both political and corporate clients.
According to the New York Times, it was launched with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by the-then future Trump White House adviser Steve Bannon.
Facebook says the data were harvested by a British academic, Aleksandr Kogan, who created an app on the platform that was downloaded by 270,000 people, providing access not only to their own personal data but also their friends’.
Facebook said Kogan then violated its policies by passing the data to Cambridge Analytica. Facebook has since suspended both the consulting firm and SCL (Strategic Communication Laboratories), a government