Facebook Drops After FTC Confirms Probe Of Data Practices

Shares of Facebook (FB) dropped in late morning trading after the Federal Trade Commission announced it is investigating the company’s data practices in the wake of the Cambridge Analytica leak of 50 million users’ information.

FTC CONFIRMS PROBE: The FTC this morning confirmed that it is probing Facebook’s data practices. In a statement, the agency said it “takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices.” Citing a person familiar with the matter, Bloomberg’s Sara Forden said last week that the FTC was investigating Facebook over whether it violated terms of a consent decree over its use of personal data. The investigation involves whether the social media giant allowed Cambridge Analytica to receive some user data in violation of its policies, the source told Forden.

WHAT’S NOTABLE: According to reports, Cambridge Analytica harvested private information from more than 50M users in developing techniques to support President Donald Trump’s 2016 election campaign. The data analytics company has since been suspended by the social media platform, with Facebook hiring a digital forensics firm, Stroz Friedberg, to conduct a comprehensive audit of Cambridge Analytica. The data analytics company has agreed to comply and afford the company complete access to their servers and systems. On Thursday, following a statement by Facebook CEO Mark Zuckerberg addressing concerns and announcing additional measures to ensure user privacy, House Energy and Commerce Committee Chairman Greg Walden and Ranking Member Frank Pallone released a statement calling on Zuckerberg to testify before the committee. New York State Attorney General Eric Schneiderman announced last week that he and Massachusetts Attorney General Maura Healey had sent a demand letter to Facebook as part of a joint probe stemming from the fallout, and Connecticut Attorney General George Jepsen also announced his own probe. Additionally, the U.K.’s information and data privacy regulator is probing whether Facebook responded “robustly,” NBC News reported, citing Information Commissioner Elizabeth Denham.