Facebook Inc. (FB) shares fell for the third day in four Thursday after CEO Mark Zuckerberg broke his silence and apologised for the social media group's data scandal and said he was open to the idea of tougher government oversight for the tech industry.
Zuckerberg, who has faced criticism for his decision to wait several days to respond to allegations that a British media consultancy improperly gained access to 50 million Facebook users' data and may have used it to sway the 2016 Presidential elections, issued a statement on the group's public website, was interviewed in the New York Times and appeared on CNN in an effort to stem the flow of investors exiting the stock and ease pressure from regulators on both sides of the Atlantic.
"This was a major breach of trust," Zuckerberg admitted to CNN's Laurie Segal. "I'm really sorry this happened. We have a basic responsibility to protect people's data. and if we can't do that, we don't deserve the opportunity to serve people." When asked why Facebook is not regulated, given the high stakes related to data privacy and potential influence on politics by bad actors, Zuckerberg responded that "I'm not sure we shouldn't be regulated", before adding that "I actually think the question is more what is the right regulation rather than yes or no, should it be regulated? ... People should know who is buying the ads that they see on Facebook."
However, he appeared to suggest that he wasn't eager to appear before Congress to explain his company's role in what is being called the biggest data scandal in social media history, indicating only that he would testify if he was the "right person" to do so.
"We have a responsibility to protect your data, and if we can't then we don't deserve to serve you, Zuckberg said in his Facebook statement. "I've been working to understand exactly what happened and how to make sure this doesn't happen again."
TheStreet's Jim Cramer talks Facebook below.
"The good news is that the most important actions to prevent this from happening again today we have already taken years ago. But we also made mistakes, there's more to do, and we need to step up and do it."
Action Alerts Plus holding Facebook shares slid 1.66% at the opening bell to change hands at $166.58 each, a move that takes its week-to-date decline close to 10% and hive more than $50 billion from its market value.
Shares in other social media and data-heavy tech companies were also weaker in pre-market trading, with Twitter Inc. (TWTR) marked 2.32% lower at $31.97 and Action Alerts Plus holding Apple Inc (AAPL) , the world's biggest tech company, fell 0.83% lower at $169.85. Snap Inc. (SNAP) shares were indicated 0.84% lower at $16.43.
However, Zuckerberg's PR offensive hasn't entirely dampened criticism of neither his handling of the data issue nor his seeming reluctance to face questions from lawmakers.
"This isn't going to cut it," said Democratic Congressman David Cicilline of Rhode Island in response to Zuckerberg's post. "Mark Zuckerberg needs to testify before Congress."
Facebook is now also the subject of a class action lawsuit filed in San Francisco Federal Court late Tuesday by the Rosen Law Firm, which alleges that the Menlo Park, Calif.-based group "violated its own purported data privacy policies by allowing third parties to access the personal data of millions of Facebook users without the users' consent" and made "statements were materially false and misleading at all relevant times."