Facebook stock rebounds after FTC investigation news
Facebook started Monday with a litany of legal challenges and a plunging stock price. By day's end - shares had eked out a gain.
The Federal Trade Commission announced Monday morning that it was investigating Facebook's (FB) data privacy practices. The announcement sent the stock down more than 5 percent to levels not seen since July 2017.
Shortly after, a number of privacy groups announced they were filing complaints about the use of Facebook data by Cambridge Analytica, a data-mining company, including one that alleged Cambridge broke laws against foreign involvement in U.S. elections.
Also on Monday, a group of 37 state attorneys general issued a demand for Facebook to explain its data protection practices.
"As we look into what happened with Facebook and Cambridge Analytica, our top priority is determining whether Facebook violated their own 'Terms of Service' or data breach notification laws," Pennsylvania AG Josh Shapiro, who is leading the coalition, said in a statement.
And legislators have called on CEO Mark Zuckerberg to testify before Congress, and the attorneys general of three states have launched investigations.
Even with the stock's bounce-back on Monday, shares of Facebook are down more than 15 percent from a high of $193 last month.
The FTC's announcement confirmed rumors that an investigation of Facebook was in the works. In a statement, the agency said: "The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. The FTC is confirming an open non-public investigation into these practices."
Facebook said in a statement on Monday that the company remains "strongly committed" to protecting people's information and that it welcomes the opportunity to answer the FTC's questions.
Facebook had settled with the FTC in 2011 after the agency alleged that the social media giant misled its users by making data public that it had promised would be private. As part of that settlement, Facebook agreed to ask for users' permission before sharing their data more broadly than their privacy settings specified.
When it was revealed that Cambridge Analytica, a data mining firm, was able to obtain 50 million Facebook users' data without their consent, privacy groups questioned whether Facebook ran afoul of the 2011 agreement.
Legal actions stemming from the controversy have been mounting since last week. The government watchdog group Common Cause filed a complaint Monday alleging that Cambridge Analytica, which is headquartered in the U.K., broke laws concerning foreign involvement in U.S. elections.
The Associated Press contributed to this report.
