Facebook comes under FTC scrutiny as stock slides

Facebook's privacy practices are being investigated by the Federal Trade Commission, the government agency confirmed Monday. The announcement helped cause a slide in the company's stock.

The investigation follows reports that the data collection firm Cambridge Analytica, which worked on the 2016 Trump presidential campaign, gained access to the personal data of more than 50 million Facebook users.

The agency said it plans to determine whether the social media giant violated a consent decree it signed in 2011 to protect users' privacy.

The decree required Facebook to notify and receive explicit permission from users before sharing their personal information beyond the limits dictated by their privacy settings. Each violation of the agreement, which the agency reached with Facebook as part of a settlement over third-party apps, carries a penalty of up to $40,000 a day.

The agency's acknowledgment of its investigation, which was first reported last week, helped push Facebook's stock down as much as 6.5 percent Monday morning before recovering somewhat by midday. Facebook said last week that it was anticipating an inquiry from the agency.

The FTC said in a statement Monday that it "takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook."

Lawmakers have called for Mark Zuckerberg, Facebook's chief executive, to appear in hearings on Capitol Hill. Last week, the Republican and Democratic leaders of the House and Senate commerce committees formally invited Zuckerberg to testify.

Sen. Chuck Grassley, R-Iowa, chairman of the Senate Judiciary Committee, invited Zuckerberg on Monday to testify about privacy standards next month and also extended the invitation to Google's chief executive, Sundar Pichai, and Twitter's chief executive, Jack Dorsey.

And a group of 37 attorneys general on Monday sent a letter to Zuckerberg asking for details about Facebook's privacy safeguards.

"Facebook has made promises about users' privacy in the past, and we need to know that users can trust Facebook," the group wrote. "With the information we have now, our trust has been broken."

Facebook has been targeted by several lawsuits and investigations from governments and shareholders since reports detailed the use of Facebook user information by Cambridge Analytica.

Many users have threatened to deactivate or delete their accounts in protest.


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