FACEBOOK IS UNDER INVESTIGATION by the US Federal Trade Commission which is probing the company due to concerns over its data privacy practices raised in the Cambridge Analytica scandal.
If you've not had your head buried in the sand for the past week, you'll already be aware that Facebook suspended data analysis and marketing firm Cambridge Analytica a week ago following claims that it breached an agreement to harvest data on 50 million users.
The company, according to reports, used an academic app to harvest not just the data of users who responded to a questionnaire, but all their Facebook friends' data, too - before the company belated closed that loophole.
Facebook ordered Cambridge Analytica to destroy the personal data in 2015, when it found out about the abuse of the academic app. But it is claimed that Cambridge Analytica held on to the data, while assuring Facebook that it had complied with the request.
Generally, the FTC only opens investigations in cases of great public interest, which suggests just how high profile the Facebook privacy concerns are. That's perhaps not very surprising when considering it's claimed to have used the data to target voters in elections in the US and UK.
Cambridge Analytica's claims, though, may be over the top.
On the same day the case was opened, a two-party coalition comprising 37 state attorneys wrote to the social media giant demanding to know more about its role in the manipulation of users' data by the consultancy.
"These revelations raise many serious questions concerning Facebook's policies and practices, and the processes in place to ensure they are followed," the letter claimed. "We need to know that users can trust Facebook. With the information we have now, our trust has been broken."
According to Reuters, "a person briefed on the matter" claimed that the FTC investigation is looking at more than whether Facebook violated a 2011 consent order it reached with the FTC over its privacy practices.
Apparently, if the FTC finds Facebook violated terms of the consent decree, it has the power to fine it thousands of dollars per day, per violation, which could add up to billions of dollars.
"We remain strongly committed to protecting people's information," Facebook's deputy chief privacy officer, Rob Sherman, said in a statement. "We appreciate the opportunity to answer questions the FTC may have."
Facebook shares fell by as much as 6.5 per cent, briefly dipping below $150 for the first time since July 2017 after news of the revelation spread.
The shares are still down 13 per cent since 16 March, when Facebook first acknowledged that user data had been improperly channelled to Cambridge Analytica. µ
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