UPDATED, 9:45 AM with AGs’ letter: Facebook’s stock dropped in early morning trading as the Federal Trade Commission issued a statement confirming that it is investigating the social network’s privacy practices in the wake of the Cambridge Analytica scandal.
Meanwhile, California Attorney General Xavier Becerra joined with 36 other state attorneys general in demanding answers from Facebook about its business practices and safeguards to protect users’ privacy. More on that below.
The FTC’s consumer protection bureau issued a statement that it’s firmly committed to protecting consumer privacy, and will use enforcement actions against those companies that fail to live up to their promises.
“The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” said Tom Pahl, Acting Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Today, the FTC is confirming that it has an open non-public investigation into these practices.”
The agency’s investigation will focus on whether the Cambridge Analytica data leak, in which the personal information of 50 million Facebook users was collected without their consent, violated a consent decree reached in 2011 regarding the social network’s handling of personal user data.
“We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have,” Rob Sherman, Facebook’s deputy chief privacy officer, said in a statement.
As for the letter from those 37 state AGs: “As the chief law enforcement officers of our respective states, we place a priority on protecting user privacy, which has been repeatedly placed at risk because of businesses’ failure to properly ensure those protections,” they wrote. Read the full letter here.
Government watchdog group Common Cause Monday filed a pair of legal complaints with the Federal Election Commission and the Department of Justice accusing Cambridge Analytica LTD, its parent company SCL Group Limited, CEO Alexander Nix, and former employee-turned-whistleblower Christopher Wylie of violating federal election laws that prohibit foreigners from participating directly or indirectly in the decision-making process of U.S. political campaigns, ABC reported.
The social network’s stock is trading at $155.15 this morning, down nearly 3% from Monday’s opening stock price of $160.82.
Facebook has engaged in furious damage control since The New York Times and The Guardian in the UK revealed that the data analytics firm improperly accessed users’ information to build profiles on American voters that were later used to guide Donald Trump’s 2016 campaign.
Cambridge Analytica has denied using Facebook’s data in the work it did for Trump’s campaign.
Co-founder and Chief Executive Mark Zuckerberg took out full-page ads in several newspapers Sunday, apologizing for a “breach of trust” in the scandal and pledging to take steps to limit the data apps have have access to on Facebook.
“This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to ensure this doesn’t happen again,” Zuckerberg wrote in an ad that appeared in The New York Times, Washington Post and Wall Street Journal, among other publications.
A growing number of legislators are calling on Zuckerberg to appear before Congress and explain how millions of users’ data wound up in the hands of Cambridge Analytica. Both the House Energy and Commerce Committee and the Senate Commerce, Science and Transportation committee have requested he testify.