Facebook Shares Plunge 5.2 Per Cent As FTC Confirms Investigation On Privacy

New York, Washington: The US Federal Trade Commission (FTC) confirmed on Monday it is investigating Facebook’s privacy practices following a week of privacy scandals including whether the company engaged in “unfair acts” that cause “substantial injury” to consumers. The FTC said it has an open, non-public investigation into Facebook Inc.’s privacy practices.

“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” Tom Pahl, the acting director of the FTC’s Bureau of Consumer Protection said in an emailed statement Monday.

The shares were down 5.2 per cent to $151.04 (Dh554.66) at 10:42 a.m. in New York trading, following the announcement, after losing some 14 per cent last week.

The FTC investigation, which was reported by Bloomberg last week, is focused on 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, according to a person familiar with the matter.

“FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” Pahl said. “Today, the FTC is confirming that it has an open non-public investigation into these practices.”

He added that companies who have settled previous FTC actions “must also comply with FTC order provisions imposing privacy and data security requirements.”

Facebook signed a consent decree with the FTC in 2011 settling charges that it deceived consumers by telling them they could keep their information on Facebook private, and then allowing it to be shared and made public.

Pahl said the agency “takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook.”

The world’s biggest social network is also facing calls on both sides of the Atlantic for more information on how its user data was leaked. A public apology by Facebook chief executive Mark Zuckerberg has failed to quell outrage over the hijacking of personal data.