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Class
action: Investors sue Facebook over share plunge in data scandal - 21st March
2018
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Investors
have sued Facebook over the share losses they have suffered since the damaging
revelations. Photo: AP
Facebook's
failure to safeguard privacy was blamed in an investor lawsuit for a slump in
its share price that followed the revelation users' data were harvested without
permission by a research firm connected to US President Donald Trump. The
world's largest social media network was sued in San Francisco federal court on
Tuesday by shareholders who said they suffered losses after the disclosure that
Cambridge Analytica, a British firm that aided Trump, improperly obtained profile
information on 50 million users. The
proposed class action would represent people who bought shares of Facebook from
February 3, 2017, when Facebook filed its annual report and cited security breaches
and improper access to user data, through March 19, two days after a New York
Times report revealed how data from Cambridge Analytica obtained through Facebook
was used without "proper disclosures or permission." Throughout
that period, "defendants made false or misleading statements and failed to
disclose that Facebook violated its own data privacy policies by allowing third
parties access to personal data of millions of Facebook users without their consent,"
according to the complaint. Shares
of Facebook fell further on Tuesday, sliding 4.75 per cent after the company said
it faced questions from the US Federal Trade Commission over the scandal. 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. The
case is Yuan v. Facebook Inc., 3:18-cv-01725, US District Court, Northern District
of California (San Francisco) (Bloomberg) 
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