Facebook's shares have fallen four per cent in premarket on Monday after media reports that a political consultancy that worked on US President Donald Trump's campaign gained inappropriate access to data on 50 million Facebook users.
The move would knock $21.5 billion off the social network's market value of $538 billion as of Friday's close.
One Wall Street analyst said the reports raised 'systemic problems' with Facebook's business model and a number said it could spur far deeper regulatory scrutiny of the platform.
The head of European Parliament said on Monday that EU lawmakers will investigate whether the data misuse has taken place, adding the allegation is an unacceptable violation of citizens' privacy rights.
The New York Times and London's Observer reported over the weekend that private information from more than 50 million Facebook users improperly ended up in the hands of data analytics firm Cambridge Analytica.
It also said the information had not been deleted despite Facebook demands dating back to 2015.
"We think this episode is another indication of systemic problems at Facebook," said Brian Wieser, analyst at New York-based brokerage Pivotal Research Group, which already has a "sell" rating on a stock that rose 60 per cent last year.
Wieser argued that regulatory risks for the company would intensify and enhanced use of data in advertising would be at greater risk than before.
He added, however, that it was unlikely to have a meaningful impact on the company's business for now, with advertisers unlikely to "suddenly change the trajectory of their spending growth on the platform".
