The US Federal Trade Commission has said it will investigate Facebook for alleged data breach following the Cambridge Anlaytica scandal. The investigators will look into how the platform handles user information. Mark Zuckerberg apologized last week following a revelation on the alleged role of British company, Cambridge Analytica, in misusing personal user data from different sources, including Facebook, for politically influencing voters through unfair means.
In a statement on Monday, the trade commission said that it has started an "open non-public investigation" into Facebook's privacy practices. "The Federal Trade Commission takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook," said Tom Pahl, acting director in the Bureau of Consumer Protection, USFTC.
The Federal Trade Commission safeguards consumers' interests, educates them and promotes competition. Pahl added that the FTC is firmly and fully committed to using all of its tools to safeguard the consumer's interest.
"We would adopt enforcement action against those who have failed to honour privacy promises, including Privacy Shield," the statement said. "Companies who have agreed to previous FTC actions must also comply with FTC order provisions, which stresses on privacy and data security requirements."
In a separate development, attorney generals of a total 37 states in the US sent a signed letter to Facebook CEO Mark Zuckerberg asking him to explain how users' personal data was given to to third parties without their consent.
The attorney generals demanded that the modus operandi of how Facebook manipulated user data and how Cambridge Analytica misused the private data should be out in public.
Early reports highlighted that user data of at least 50 million Facebook profiles may have been misused and misappropriated by third-party software developers for political and personal gains.
It also highlighted that Facebook gained 30% of the payments made through the developers' applications by Facebook users.
"Facebook should be clear that this is not a technical data breach. Reports said that Facebook allowed third parties to use personal data of consumers, which are not mentioned in the terms and conditions. This is confusing and perhaps misleading for users," the letter said.
The letter also stated that Facebook has made promises about users' privacy in the past, and we need to know that how users can now trust Facebook.
Stocks touch new low
Facebook's share price dropped 5% on Monday following the FTC probe and attorneys generals' letter. The company has lost $60 billion and the share prices have fallen to a four-year low. Market experts reportedly told newspapers that the data scandal has hit entire the tech sector, which is fearing regulatory crackdown not only on Facebook but also on other big players.
Amazon and Google lost 3.4% and 5.6%, respectively, while Apple and Netflix shares fell a respective 5.8% and 4.6% till the markets closed last week on Friday.
Facebook's recent crisis of personal data leak has made people upset worldwide and led to a #DeleteFacebook campaign. Several high-profile individuals, including SpaceX and Tesla CEO Elon Musk, singer Cher, Hollywood actor and comedian Jim Carrey, actor Farhan Akhtar have supported the campaign. SpaceX's and Tesla's Facebook profiles disappeared last week, following which Carrey and Akhtar deleted their accounts.