UK firm in Facebook row suspends CEO as lawmakers demand answers

Cambridge Analytica, the British firm at the centre of a major data scandal rocking Facebook, has suspended its chief executive as lawmakers demanded answers from the social media giant over the breach.

Alexander Nix will stand aside pending an investigation into boasts he made to an undercover reporter about entrapping politicians and operating shadowy front companies "and other allegations", the company board said.

"In the view of the Board, Mr. Nix's recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation," the company said in a statement.

Cambridge Analytica has denied claims it harvested data from up to 50 million Facebook users as part of its work for US President Donald Trump's election campaign.

But the row has plunged Facebook into a major scandal, facing investigations on both sides of the Atlantic over its use of personal data, while its share price has been hit.

A British parliamentary committee called on Facebook founder Mark Zuckerberg yesterday to personally explain to them what happened with "this catastrophic failure of process".

Committee chairman Damian Collins, who is leading an investigation into fake news, said officials at the firm had "consistently understated" the risk of data being taken from users without consent.

Zuckerberg has also been invited to address the European Parliament, its president Antonio Tajani said.

"Facebook needs to clarify before the representatives of 500 million Europeans that personal data is not being used to manipulate democracy," he tweeted.

The parliament and the European Commission, the 28-nation EU executive, have already called for an urgent investigation into the scandal.

US lawmakers have also called on Zuckerberg to appear before Congress, along with the chief executives of Twitter and Google.

Facebook shares were down 5.3 per cent at around 11:30 pm IST, following reports the Federal Trade Commission is investigating whether it violated a 2011 consent decree over the handling of consumer data.

Shares of Facebook had already lost 6.8 per cent on Monday.

A former Cambridge Analytica employee claims it developed an app downloaded by 270,000 people to scoop up information about their friends, which were then used to design software to predict and influence voters' choices at the ballot box.

The company blames the academic who developed the app, University of Cambridge psychologist Aleksandr Kogan, for misusing the data, adding that it was never used on the Trump campaign, and has anyway been deleted.

But the firm's reputation took a fresh hit on Monday, with the broadcast of secret footage showing Nix saying it could entrap politicians in compromising situations with bribes and sex workers.

He also said the firm secretly campaigns in elections around the world, including by operating through a web of shadowy front companies, or by using sub-contractors, according to Channel 4 News.