Facebook, Inc. FBis still recovering from the damage wreaked by the Cambridge Analytica data scandal. It had affected around 87 million users and allegedly influenced the 2016 U.S. presidential elections.
Notably, the European Union (EU) had defamed Facebook regarding the data breach fiasco and expressed its interest in initiating an investigation on Mar 20, right after the news went viral.
Per CNBC, EU is planning to intensify the investigation process related to “harvesting of personal information.” The Working Party 29, which takes care of the data-protection authorities of the EU nations, will reportedly form a Social Media Working Group aimed at creating unified strategies for further investigation.
Furthermore, a new law related to data privacy called General Data Protection Regulation (GDPR) is expected to come into existence in the EU on May 25. Per the latest introduction, Europeans will have the rights of knowing which of their personal data businesses are collecting and will have the right to delete those if need be.
This law, once implemented, might impact companies which generate most of the revenues from advertisements which, in turn, need a huge amount of personal data for correct targeting of customers.
For the social media giant, Facebook, which generated around 98% of its revenues in 2017 from advertisements, this implementation might be a huge drag on its top-line growth. Meanwhile, Facebook’s stock has been hit badly by the alleged data misuse scandal. The company’s shares have lost around 5% since the news surfaced on Mar 19.