According to Bloomberg News Facebook has dropped nearly $100 billion in market value over the past 10 days, and is headed for its worst month in nearly six years. Its stock price was down over 6% Monday in early trading.
And the bad news keeps on coming for the social media giant.
The Federal Trade Commission (FTC) also confirmed Monday that it has opened a non-public probe into Facebook’s privacy practices, saying it “takes very seriously” recent reports about misuse. PoliticusUSA reported last week that the FTC is investigating if Facebook has been in violation of the terms of a consent decree agreed to in 2011. The current investigation concerns the company’s possible misuse of user data that was given to data firm Cambridge Analytica without the knowledge or express consent of the Facebook users..
The FTC issued a formal statement on Monday saying that the agency is currently investigating Facebook data practices and the possible breach of federal privacy laws. The company is facing increasing scrutiny from shareholders and governments as well as the FTC over the Cambridge Analytica scandal.
“The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” said Tom Pahl, acting director of the FTC’s Bureau of Consumer Protection. “Today, the FTC is confirming that it has an open non-public investigation into these practices.”
Facebook’s officer in charge of privacy, Rob Sherman, said that the company remains “strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have.”
Politicians in Washington, London, and several European countries have expressed a great deal of concern about Facebook’s role in the Cambridge Analytica data debacle. Both Congress and the U.K. Parliament have called for investigations. Several members of Congress and Parliament have demanded that Facebook CEO Mark Zuckerberg testify in person in front of their investigative committees.
Although Zuckerberg has not done that, he did say last week that he might be open to giving his live testimony to Congress, although he may get a subpoena and have no choice.
Back in 2011 the FTC settled an action against Facebook for privacy violations. The government found that Facebook was allowing third-party applications much more data access than was required. Facebook was then either selling the data or selling the right to use the data by third parties.
At the time of this FTC action, called a “consent decree” Facebook agreed they would get “express consent” of users “before sharing their information beyond their privacy settings.” The FTC is reportedly looking into whether Facebook violated the settlement.
“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” Pahl said in the statement Monday. “Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements.”
I am a lifelong Democrat with a passion for social justice and progressive issues. I have degrees in writing, economics and law from the University of Iowa.