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Illustration: Rebecca Zisser/Axios 

Facebook is caught in the middle of a rapidly unfolding scandal over Cambridge Analytica's improper gathering of data on millions of users, and what that exposed about the company's data collection. The fiasco has drawn the interest of lawmakers and regulators and rekindled the debate over its role in the 2016 presidential election.

Why it matters: The bad headlines continued to pile up; "A hurricane flattens Facebook" said Wired, "Silicon Valley insiders think that Facebook will never be the same" per Vanity Fair, "Facebook is facing its biggest test ever — and its lack of leadership could sink the company" from CNBC, and — as we've yet to hear from the company's top leaders — "Where is Mark Zuckerberg?" asks Recode.

Facebook reaches a tipping point
  • It's not that the reports reveal anything particularly new about how Facebook's back end works — developers have understood the vulnerabilities of Facebook's interface for years. But stakeholders crucial to the company's success — as well as the public seem less willing to listen to its side of the story this time around.
Wall Street turns on social media after Facebook scandal
  • Calls for tighter regulation around user privacy and data transparency could completely upend the powerful business models around tech that have, for years, served as lucrative investment opportunities.
Facebook to brief Congress as data scandal rages
  • Interest from lawmakers and government officials continues to grow as additional information is released on the details of Facebook's involvement with the Trump-linked data analytics firm. Two state AGs have said they are investigating Facebook's actions.
Facebook employees got to ask questions, but not of Mark Zuckerberg
  • Facebook's top two executives have remained silent throughout the ongoing reports while demands for answers from the public and employees alike. Facebook held a meeting Tuesday where employees could ask questions about the Cambridge Analytica issue, but neither Zuckerberg nor Sandberg were in attendance.
Facebook's folly could impact other businesses
  • Increased calls for new user privacy regulations could upend the entire social media business model, and create massive ripples for other businesses that rely on that model for their own marketing efforts. That's a big reason why the Dow fell 1.4% Monday, even though Facebook isn't actually part of the Dow.

Go deeper

1 hour ago - World

Netanyahu and Israel reluctantly adjust to a post-Trump Washington

Netanyahu (R) and Biden in 2010. Photo: Avi Ohayon/GPO via Getty

Prime Minister Benjamin Netanyahu and his close aides are very nervous about the transition to a new U.S. administration after a four-year honeymoon with Donald Trump. One Israeli official told me it felt like going through detox.

What he's saying: Netanyahu congratulated Biden minutes after he was sworn in, saying in a statement that he looked forward to working together to "continue expanding peace between Israel and the Arab world and to confront common challenges, chief among them the threat posed by Iran."

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. State of play: New coronavirus cases down, but more bad news ahead.
  2. Politics: Biden set to immediately ramp up federal pandemic response with 10 executive actions — Scoop: Joe Biden's COVID-19 bubble.
  3. World: Biden will order U.S. to rejoin World Health OrganizationBiden to bring U.S. into global COVAX initiative for equitable vaccine access.
  4. Vaccine: Amazon offers to help Biden administration with COVID vaccine efforts.
Dion Rabouin, author of Markets
3 hours ago - Economy & Business

First glimpse of the Biden market

Photo: Jonathan Ernst-Pool/Getty Images

Investors made clear what companies they think will be winners and which will be losers in President Joe Biden's economy on Wednesday, selling out of gun makers, pot purveyors, private prison operators and payday lenders, and buying up gambling, gaming, beer stocks and Big Tech.

What happened: Private prison operator CoreCivic and private prison REIT Geo fell by 7.8% and 4.1%, respectively, while marijuana ETF MJ dropped 2% and payday lenders World Acceptance and EZCorp each fell by more than 1%.