Pressure on Zuckerberg rises as data firm brags about Facebook mining

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Pressure on Zuckerberg rises as data firm brags about Facebook mining

By Stephanie Bodoni & Nate Lanxon

Facebook Chief Executive Officer Mark Zuckerberg may have to do a tour of European parliaments to appease politicians in the wake of allegations a British firm that helped Donald Trump win the 2016 election kept information about tens of millions of the social network's users.

Mark Zuckerberg's fortune has taken a big hit and Facebook's reputation is in shatters amid the uproar about the use of personal user information.

Mark Zuckerberg's fortune has taken a big hit and Facebook's reputation is in shatters amid the uproar about the use of personal user information.Credit: The New York Times

Damian Collins, head of a UK parliament committee investigating the impact of social media on recent elections, invited Zuckerberg to answer for a "catastrophic failure of process" as reports emerged concerning Cambridge Analytica, the firm at the centre of the privacy scandal.

Soon after, European Parliament President Antonio Tajani said his assembly, which meets in Brussels and Strasbourg, France, issued a similar invite. He said in a tweet on Tuesday that lawmakers had invited Zuckerberg "to clarify before the representatives of 500 million Europeans that personal data is not being used to manipulate democracy."

The invites came as news emerged that Facebook is drawing scrutiny from the main US privacy watchdog and half a dozen powerful congressional committees over how the personal data of 50 million users was obtained by Cambridge Analytica.

The US Federal Trade Commission is probing whether Facebook violated terms of a 2011 consent decree over its handing of personal user data that was transferred to Cambridge Analytica without users' knowledge, according to a person familiar with the matter. The FTC will be sending a letter to the company, another person said. Facebook slumped on the news, extending Monday's decline.

The FTC is the lead US agency for enforcing companies' adherence to their own privacy policies and could fine the company into the millions of dollars if it finds Facebook violated a 2011 consent decree.

"The FTC should give this situation a thorough look to determine if there's a decree violation," Gene Kimmelman, a former chief counsel of the Department of Justice's antitrust division, said in a statement. "The FTC should use all of its power to prevent this from ever happening again."

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'No evidence, no papertrail'

Meanwhile, senior executives of Cambridge Analytica were recorded on camera boasting about the research and analysis they did for the Trump campaign.

In part three of an investigation aired on Tuesday by Britain's Channel 4 News, an undercover reporter films Cambridge Chief Executive Officer Alexander Nix saying: "We did all the research, all the data, all the analytics, all the targeting, we ran all the digital campaign, the television campaign and our data informed all the strategy."

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The executive also acknowledged his company used a self-destructing email server to communicate with clients in order to eliminate evidence of their contact.

"You send them and after they've been read, two hours later, they disappear," Nix was recorded telling an undercover Channel 4 News reporter in a private meeting. "There's no evidence, there's no paper trail, there's nothing."

The board of Cambridge Analytica suspended Nix, effective immediately, the company said in a statement. Nix's "recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation," the board said.

Alexander Tayler will serve as acting CEO while an independent investigation is launched to review the comments and allegations, the board said.

Channel 4 News filmed a series of meetings at London hotels over four months between November 2017 and January 2018, using an undercover reporter posing as a fixer for a wealthy client hoping to get candidates elected in Sri Lanka.

Cambridge, originally funded by former Renaissance Technologies co-CEO and early Trump backer Robert Mercer, uses data to reach voters with hyper-targeted messaging, including on Facebook and other online services. Cambridge was hired to help with voter outreach by the Trump campaign, whose former campaign manager, Steve Bannon, had been on its board.

In the most recently released tapes, Nix belittled representatives on the US House Intelligence Committee after he voluntarily attended a private interview the last year as part of its investigation into Russian interference during the presidential campaign.

"I went to speak to them and the Republicans asked three questions," he said. "Five minutes, done." He added that during the same meeting Democratic interviewers asked two hours of questions.

'They don't understand how it works'

"They're politicians, they're not technical," the executive told Channel 4's reporter. "They don't understand how it works."

In a previous Channel 4 News expose, the undercover reporter filmed Cambridge Analytica executives talking about how the firm could use prostitutes and former spies to ensnare politicians and influence elections. In one video, Nix said the company could "send some girls around to the candidate's house."

In an earlier interview with the BBC's Newsnight, Nix said: "A lot of the allegations that have been put to Cambridge are entirely unfounded and extremely unfair." Cambridge Analytica said in a statement that it "strongly denied the claims" that it misused Facebook data.

"Cambridge Analytica has never claimed it won the election for President Trump," a spokesman for the company told Channel 4 News ahead of Tuesday's broadcast. "This is patently absurd. We are proud of the work we did on that campaign, and have spoken in many public forums about what we consider to be our contribution to the campaign."

Social media stocks tumble

Shares of Facebook , Twitter and Snapchat-owner Snap fell further on Tuesday as Wall Street fretted over potential regulatory scrutiny that could hobble the business of the social networks.

Facebook lost 4.75 per cent after it said it faced questions from the US Federal Trade Commission. Since the data mining was first revealed on Saturday, the world's largest social media company has lost $US60 billion of its stock market value.

With concerns that Facebook's handling of users' data would lead to stepped up government regulation, social media rival Twitter slumped 9 per cent and was on track for its worst day since July last year. Snap fell nearly 4 per cent to $US15.86, dipping further below the $US17 price set in its public listing a year ago.

Adding to regulatory jitters, the Israeli newspaper Haaretz reported that Israel Justice Minister Ayelet Shaked accused Twitter of "lack of cooperation," saying terrorist groups were using the site and that Israel was considering a law to combat such activity.

Bloomberg, with Reuters

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