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Revelations About Cambridge Analytica Data Mining Send Facebook Shares Plummeting

March 19, 2018 - 5:46 pm

NEW YORK (WCBS 880/AP) -- Shares of Facebook plunged Monday on reports than an analytics company gathered data on more than 50 million Facebook users without their permission.

It was the worst day of trading for Facebook since 2012 Monday after details emerged late last week about Cambridge Analytica, a data mining company working for the Trump campaign, improperly obtained and kept data on tens of millions of users during the 2016 election.

A former employee of Cambridge Analytica said Monday on NBC's “Today” that the group identified voters who might be swayed and “injected content” that may or may not be true.

Late Friday, Facebook said it would ban Cambridge Analytica, first saying the company improperly obtained information from 270,000 people who downloaded a purported research app described as a personality test. Facebook first learned of the breach back in 2015, but did not disclose it until recent days.

Kurt Wagner, senior editor at the technology news website Recode, explained to WCBS 880’s Steve Scott and Michael Wallace what Cambridge Analytica is accused of doing.

"Kind of the way it’s been described is that they collect psychographic profiles of people – so essentially, they pull stuff from the internet to create a profile of who you might be as a voter, and then they can use that information to, in this case, help, you know, Donald Trump to try and make sure that he’s targeting people with the right kind of ads online,” Wagner said.

Wagner said the story that broke over the weekend was that Cambridge Analytica bought “a lot of data” from a Cambridge University professor, who had collected it using an app that plugged into Facebook’s application programming interfaces.

“Essentially, people downloaded his app, logged in with their Facebook account, and therefore granted him access to a bunch of their personal data. He collected it and then sold it to Cambridge Analytica,” Wagner said. “So the big problem here is that Facebook, you know, is now coming out and saying: ‘Hey, you’re not allowed to sell our data in that way. That was against our policies.’ And Cambridge Analytica is saying: ‘Hey, we didn’t realize that we were buying data in this way. We deleted it at the time.’”

But the stories over the weekend from the New York Times and the Observer indicated that Cambridge Analytica did not delete the data, even after promising Facebook it would.

Facebook has insisted that there was no breach involved with Cambridge Analytica, and no one hacked into their servers and got past their firewalls. The tech giant said Cambridge Analytica obtained the data legitimately, but the problem was that the analytics firm went on to sell the data.

“So Facebook is really trying to avoid any blame here by saying, ‘This was all kind of done appropriately through our terms of service until this professor then sold the data to an outside marketing firm. So, you know, I think you could argue that obviously, it’s easy enough for outsiders to get this data and then sell it before Facebook has any idea what’s going on,” Wagner said. “There’s a lot of, you know, policies that maybe they should be looking at to fix. But Facebook wants very clearly for people to know that there was no technical breach in the way that, you know, it has been described.”

Wagner explained that the specific technology that was used to obtain the data was “Facebook Login,” in which other apps allow users to log in with their Facebook accounts rather than creating new usernames and passwords. Other companies such as Google, LinkedIn, and Twitter have similar login options, Wagner said.

“The question then is how much of the data is transferred to, you know, in this case the professor, and how much of it do the big tech companies like Facebook and Google get to retain and protect,” Wagner said. “What we’re learning through this weekend is that a lot of the data, once it gets into the hands of people outside the company, it’s really hard to stop it from spreading from there.”

Data from the Federal Election Commission show that Cambridge Analytica earned $5.9 million in 2016 from the campaign to elect Donald Trump for president.

Cambridge also earned $5.8 million from U.S. Sen. Ted Cruz (R-Texas)'s failed presidential campaign.

In total, Cambridge Analytica earned more than $16 million from 2014 to 2016 from nearly 20 Republican candidates and political committees.

Shares of Facebook dropped 7 percent on Monday. The shares sank $13.43 in midday trading and dragged down the rest of the technology sector, with fears rising of increased government regulation.

Alphabet, Google's parent company, lost almost 3 percent and Microsoft fell almost 2 percent.

(Copyright 2018 WCBS 880. The Associated Press contributed to this report.)