Facebook Shares Drop Again After FTC Launches Investigation

Facebook doesn’t seem to be able to catch a break in the past week and maybe rightfully so considering the data scandal it is involved in regarding Cambridge Analytica leaking the information of 50 million users.

Last week the Federal Trade Commission had denied commenting on whether or not it is investigating Facebook and if the social network giant violated a consent decree that it signed with the agency back in 2011.

This changed on Monday when the FTC announced that it is in fact investigating the company’s data practices.
The agency stated, “The FTC 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.”

A violation of the consent decree could mean a penalty of $40,000 per violation for Facebook.

“We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have,” Rob Sherman, deputy chief privacy officer for Facebook, stated to CNBC.

The full statement from the FTC reads as follows:

“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers. Foremost among these tools is enforcement action against companies that fail to honor their privacy promises, including to comply with Privacy Shield, or that engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act. Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements. Accordingly, the FTC 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.”

Shares of Facebook have dropped over 13% in the last five days.

Disclaimer: We have no position in Facebook, Inc. Common Stock (NASDAQ: FB) and have not been compensated for this article.