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Facebook Probed by Federal Trade Commission, Stock Tanks 6 Percent

FTC announces it is investigating social media giant’s handling of user data

The Federal Trade Commission announced on Monday it is investigating Facebook’s handling of user data, after it was revealed 50 million users had their information unknowingly accessed by data firm Cambridge Analytica.

“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 case substantial injuries to consumers in violation of the FTC Act,” the agency said in a statement. “Companies who have settled previous FTC actions must also comply with FTC order proivisions imposing piracy and data secrity 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.”

The FTC will be checking if Facebook violated a consent decree the company signed in 2011, requiring the social network to receive user permission to share their data with third parties. Each violation can cost up to $40,000. The social network has been under fire after it was revealed Cambridge Analytica paid a Cambridge professor for access to user data on millions of people — and waited until two weeks ago to suspend the firm from its site.

Facebook’s stock took a 6 percent hit in early morning trading on Monday, falling below $150 a share for the first time since last summer. The drop builds off last week’s momentum, when Facebook fell more than 13 percent.

More to come…