Social media shares slide
Shares in Facebook continued their sharp slide, extending their dip this week to around 10% that has cost CEO and founder Mark Zuckerberg around $10bn (€8bn) in paper losses.
It comes as the social media giant — now valued at around $478.25bn — is drawing scrutiny from the main US privacy watchdog and half a dozen powerful congressional committees over how the personal data of 50m users was obtained by a UK data analytics firm that helped elect President Donald Trump.
The US Federal Trade Commission is probing whether Facebook violated terms of a 2011 consent decree over its handling of personal user data that was transferred to Cambridge Analytica without users’ knowledge. The FTC will be sending a letter to the company, accord to a source.
Facebook said it would conduct staff-level briefings today. That includes House and Senate Judiciary Committees, as well as the commerce and intelligence committees of both chambers.
The FTC is the lead US agency for enforcing companies’ adherence to their own privacy policies and could fine the company into the millions of dollars if it finds Facebook violated a 2011 consent decree.
“The FTC should give this situation a thorough look to determine if there’s a decree violation,” Gene Kimmelman, a former chief counsel of the Department of Justice’s antitrust division, said in a statement. “The FTC should use all of its power to prevent this from ever happening again,” he said.
In an earlier statement Cambridge Analytica said it “strongly” denied “false allegations” in the media and said the Facebook data at the centre of the scandal was not used as part of services provided to the Trump campaign.
Under the terms of the 2011 settlement, Facebook agreed to get user consent for certain changes to privacy settings as part of its resolution of federal charges that it deceived consumers and forced them to share more personal information than they intended. That complaint arose after the company changed some user settings without notifying its customers, according to an FTC statement at the time.
“The FTC takes the allegations that the data of millions of people were used without proper authorisation very seriously,” FTC Commissioner Terrell McSweeny, a Democrat, said.
- Bloomberg and Irish Examiner
