Investors and users are now suing Facebook Inc. (FB) over reports that political data analytics firm Cambridge Analytica LLC harvested the user data of more than 50 million users without proper disclosures or permissions.
Shareholder Fan Yuan on Tuesday, March 20, filed a class action against the Menlo Park, Calif., company, CEO Mark Zuckerberg and CFO David Wehner in San Francisco federal court, alleging that Facebook "made materially false and misleading statements regarding the company's business, operational and compliance policies."
Another class action from site user Lauren Price in the same district court named Facebook and Cambridge Analytica, charging the social media company with failing to stop or actively avoiding discovery of the data mining firm's "improper data aggregation."
Over the past five days, Facebook stock has dropped 6.6%, though shares were up 2.3% to $172.01 on Wednesday afternoon.
"For investors, this really comes down to issues of transparency and accountability," said Natasha Lamb, managing partner at Arjuna Capital. "There has been a disregard for investors in general."
Last year, the fund issued a proposal urging Facebook to produce a report on the company's issues surrounding "fake news."
Zuckerberg and the company already have been in hot water with politicians and lawmakers alike thanks to this latest scandal. Here's a roundup of everyone else who has been holding Facebook's feet to the fire this week.
Widespread Investigations Begin
The U.S. Federal Trade Commission is reportedly investigating the company as well, and on Tuesday, Commissioner Terrell McSweeny issued a statement regarding the Cambridge Analytica news.
Allegations of misuse of Facebook user data is an unacceptable violation of our citizens' privacy rights. The European Parliament will investigate fully, calling digital platforms to account. #CambridgeAnalytics #CambridgeAnalyticaFiles— Antonio Tajani (@EP_President) March 19, 2018
"The FTC takes the allegations that the data of millions of people were used without proper authorization very seriously," McSweeny wrote.
New York State Attorney General Eric Schneiderman and Massachusetts Attorney General Maura Healey also sent a demand letter to Facebook on Tuesday, kicking off a joint investigation of the company and the Cambridge Analytica data breach, Schneiderman announced in a press release.
TheStreet Podcast | Facebook: How to Protect Your Data
Lawmakers Call for Answers
On Twitter, members of Congress have called for Zuckerberg to appear before the Senate Judiciary in light of the reported misuse, including Sen. Richard Blumenthal, D-Conn.
Sen. Ron Wyden, D-Ore., sent a letter to Zuckerberg on Monday asking him to "detail the extent of misuse of its users' private info" by April 13.
Facebook's failure to secure privacy of private data - that it released - seems a breach of trust and even law. Judiciary Committee should hold open hearings, with Facebook, Cambridge Analytica, and others, under oath and in public.— Richard Blumenthal (@SenBlumenthal) March 19, 2018
"With little oversight -- and no meaningful intervention from Facebook -- Cambridge Analytica was able to use Facebook-developed and marketed tools to weaponize detailed psychological profiles against tens of millions of Americans," Wyden wrote.
Sen. Amy Klobuchar, D-Minn., and Sen. John Kennedy, R-La., also sent a bipartisan letter asking for Zuckerberg and other social media executives to appear before Congress.
"This isn't the first time we've made this request, but now 50 million people who had their records stolen should add to our numbers!" Klobuchar wrote in a tweet.
News: @SenJohnKennedy & I just sent bipartisan letter to @ChuckGrassley asking for judiciary hearing w/social media CEOs including Zuckerberg. This isn't the first time we've made this request, but now 50 million people who had their records stolen should add to our numbers!— Amy Klobuchar (@amyklobuchar) March 19, 2018
When asked on Tuesday whether Zuckerberg should testify before Congress, White House Deputy Press Secretary Raj Shah told Fox News that President Donald Trump "believes Americans' privacy should be protected," and if legislators want to "look into the matter, we welcome that."
#DeleteFacebook Spreads on Twitter
The hashtag #DeleteFacebook also has gained traction with users on Twitter, including Brian Acton, co-founder of the Facebook-owned messaging app WhatsApp. Acton tweeted, "It is time. #deletefacebook," followed by a tweet promoting the encrypted messaging app Signal, into which Acton invested $50 million in February. Facebook acquired the app in October 2014 for $21.8 billion.
It is time. #deletefacebook— Brian Acton (@brianacton) March 20, 2018