A man poses with a magnifier in front of a Facebook logo on display. Picture: REUTERS/DADO RUVIC
A man poses with a magnifier in front of a Facebook logo on display. Picture: REUTERS/DADO RUVIC

London — Tech firms such as Facebook should be made liable for "harmful and misleading" material on their websites and pay a levy so that they can be regulated, British legislators said, warning of a crisis in democracy due to misuse of personal data.

Facebook has increasingly become a focus of the media committee’s inquiry into "fake news" after the data of 87-million users was improperly accessed by consultancy Cambridge Analytica.

The cost of higher privacy standards will hit Facebook’s profit margins for several years, the company said on Wednesday, wiping more than $120bn off its share price, and the company is coming under concerted regulatory scrutiny.

"Companies like Facebook made it easy for developers to scrape user data and to deploy it in other campaigns without their knowledge or consent," Damian Collins, chairman of the digital, culture, media and sport committee, said.

"They must be made responsible, and liable, for the way in which harmful and misleading content is shared on their sites."

The standards of accuracy and impartiality that tech companies are held to could be based on regulator Ofcom’s rules for television and radio, the legislators said.

The committee’s report also suggested a levy on tech companies that could contribute to an increased budget for Britain’s data regulator, the Information Commissioner’s Office (ICO), in the way in which the banking sector pays for the upkeep of its watchdog, the Financial Conduct Authority.

The ICO fined Facebook earlier in July for the Cambridge Analytica scandal.

Cambridge Analytica, which was hired by Donald Trump’s campaign in 2016, has denied its work on the US president’s election used the data.

The committee said that adverts used online in the campaign were not clearly labelled and expressed concern about a breach of spending rules by rival campaign group Vote Leave.

"We are facing nothing less than a crisis in our democracy — based on the systematic manipulation of data to support the relentless targeting of citizens … by campaigns of disinformation and messages of hate," Collins said.