Data Firm Suspends CEO Over Facebook Scandal
Facebook expressed outrage Tuesday over the misuse of its data as Cambridge Analytica, the British firm at the centre of a major scandal rocking the social media giant, suspended its chief executive.
The move to suspend CEO Alexander Nix came as recordings emerged in which he boasts his data company played an expansive role in Donald Trump’s 2016 campaign, doing all of its research, analytics as well as digital and television campaigns.
In undercover filming captured by Britain’s Channel 4 News, he is also seen boasting about entrapping politicians and secretly operating in elections around the world through shadowy front companies.
Lawmakers on both sides of the Atlantic have demanded answers after it was revealed at the weekend that Cambridge Analytica improperly harvested information from 50 million Facebook users.
Cambridge Analytica has denied using Facebook data for the Trump campaign, but the scandal has ratcheted up the pressure on the social media giant — already under fire for allowing fake news to proliferate on its platform during the US campaign.
US media reported Tuesday evening that the Federal Trade Commission is investigating Facebook over the data scandal.
Facebook said its top executives were “working around the clock to get all the facts.”
“The entire company is outraged we were deceived. We are committed to vigorously enforcing our policies to protect people’s information and will take whatever steps are required to see that this happens,” the firm said.
Cambridge Analytica’s board said meanwhile that Nix would stand aside immediately pending an investigation into the snowballing allegations against him.
“In the view of the Board, Mr. 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 company said.
In Channel 4’s recordings, Nix slights US representatives on the House Intelligence Committee to whom he gave evidence last year, claiming its Democrats are motivated by “sour grapes” and Republicans asked few questions.
“They’re politicians, they’re not technical. They don’t understand how it works,” he was caught on camera telling an undercover reporter.
He also outlines the use of a secret self-destructing email system.
“There’s no evidence, there’s no paper trail, there’s nothing,” he said of the tool, which deletes emails two hours after they have been read.
Channel 4 News broadcast an interview filmed in October last year with defeated presidential candidate Hillary Clinton, in which she said she had faced “a massive propaganda effort”.
“There was a new kind of campaign that was being run on the other side,” she said. “It affected the thought processes of voters.”
Facebook now faces investigations on both sides of the Atlantic, sending its share price tumbling another 2.6 percent after a 6.8 percent plunge Monday.
European Union officials have called for an urgent investigation while British lawmakers have asked Zuckerberg to give evidence to a UK parliamentary committee.
Zuckerberg has been asked to appear before the European Parliament.
“Facebook needs to clarify before the representatives of 500 million Europeans that personal data is not being used to manipulate democracy,” tweeted parliament president Antonio Tajani.
US lawmakers have also called on Zuckerberg to appear before Congress, along with the chief executives of Twitter and Google.
Officials in the US states of Massachusetts and New York announced they were sending a “demand letter” to Facebook for the facts of the case.
“Consumers have a right to know how their information is used — and companies like Facebook have a fundamental responsibility to protect their users’ personal information,” New York attorney general Eric Schneiderman said in a statement.
Thirteen US consumer and privacy organizations meanwhile released a letter to the Federal Trade Commission asking it to reopen a probe into Facebook, saying the firm’s admission so far “suggests a clear violation” of a 2011 consent decree.
A former Cambridge Analytica employee says it was able to create psychological profiles on 50 million Facebook users through the use of a personality prediction app that was downloaded by 270,000 people, but also scooped up data from friends — as was possible under Facebook’s rules at the time.
The end goal was to create software to predict and influence voters’ choices at the ballot box.
The company blames the academic who developed the app, University of Cambridge psychologist Aleksandr Kogan, for misusing the data, which it says was never used on the Trump campaign, and has in any event been deleted.
But the firm’s reputation took a severe hit on Monday, with the broadcast of a first batch of secret footage showing Nix saying it could entrap politicians in compromising situations with bribes and sex workers.
He also said the firm secretly campaigns in elections around the world, including by operating through a web of shadowy front companies, or by using sub-contractors, according to Channel 4 News.
A Cambridge Analytica spokesman told the news programme it does not use “untrue material for any purpose”.
Facebook, which says the data was taken without its knowledge, has launched its own investigation into Cambridge Analytica.
But it was forced to suspend its probe following a request from Britain’s information commissioner, Elizabeth Denham, who is making her own inquiries into both companies.
Denham’s office said it had yet to obtain a court warrant to search Cambridge Analytica’s servers and was now expecting to secure it on Wednesday.