Facebook plunges 7% on Wall Street; why reason should worry you

The world's largest social media company Facebook suffered the biggest one-day drop of its stocks by seven per cent on Wall Street on Monday in four years following reported data leakage of its 50 million users for alleged political purposes. The Facebook loss came after US and British media reported that the data of more than 50 million Facebook users were inappropriately used by a British data analysis company, Cambridge Analytica, in activities allegedly connected with US President Donald Trump during his 2016 campaign.

Trump`s campaign reportedly used the firm`s data during the primaries but not during the general election and Federal Election Commission numbers showed the firm collected $5.9 million in 2016 from Trump`s campaign, Xinhua cited California-based The Mercury News daily as saying.

Cambridge Analytica received user data from a Facebook app years ago that purported to be a psychological research tool, though the firm was not authorised to have that information.

Facebook admitted that an estimated 270,000 people had downloaded the app and shared their personal details with it.

Last Friday, Facebook said in an official post that it had suspended "Strategic Communication Laboratories (SCL), including their political data analytics firm, Cambridge Analytica," from its website.

It said the two companies had failed to delete user data acquired in 2015 in violation of Facebook rules.