Tech

Facebook stock tumbles after FTC confirms probe

So who doesn’t want to get in the face of Facebook Chief Executive Mark Zuckerberg?

By the close of business on Monday, federal regulators said they had opened a probe of the social network, more than three dozen state attorneys general had sent Zuckerberg a letter demanding answers about user data, a third congressional committee sought testimony from the tech mogul — and Cook County, which includes Chicago, sued the Menlo Park, Calif., company for violating state fraud laws.

In the midst of the backlash, Facebook shares in late Monday morning trading had tumbled 6.2 percent, to $149.50 — down more than 20 percent from its 2018 high.

But investors then jumped into the fray, pushing Facebook shares higher the rest of the day — to close at $160.06, up 67 cents.





The Federal Trade Commission is looking into the data practices employed by Facebook after it was revealed that the private data of 50 million users got into the hands of political consultancy Cambridge Analytica, it said in a statement.

“The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” the statement said. “Today, the FTC is confirming that it has an open non-public investigation into these practices.”

In 2011, Facebook signed a consent decree with the FTC that restricted the ways the company could share users’ personal data.

The decree was reached after the agency accused the social network of deceiving its users “by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public,” the FTC said at the time.





Among other things, Facebook had told users that third-party apps on its site wouldn’t be able to access their data, and pledged to inform users if their data was ever shared. Nevertheless, the apps got access to almost all of their personal information, according to the FTC.

Facebook agreed to a $40,000 penalty for each future violation.

The social network also found itself fighting off accusations of invading users’ privacy in other ways.

Users who checked data on them gathered by Facebook found that the company had years of contact names, telephone numbers, call lengths and text messages.

Facebook defended itself, pointing out that users were taken to a page that explicitly asks if they would like to enable the feature which would “continuously upload info about your contacts like phone numbers and nicknames, and your call and text history.”





Reports of the data collection came as Zuckerberg took out ads in multiple US and British Sunday newspapers to apologize for the Cambridge Analytica scandal.

The social media platform’s stock value has dropped over $70 billion since the revelations were first published.

With Reuters





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