The Federal Trade Commission confirmed Monday, March 26, that it has opened an investigation of Facebook following reports that a data analysis firm used by the Trump campaign improperly accessed the names, “likes” and other personal information from at least 30 million users on the social site.
The rare announcement sent Facebook’s stock tumbling – at one point Monday morning down more than 6 percent – as the company faced potential new punishment by the U.S. government, including fines that could reach well into the millions of dollars.
The FTC probe comes amid continued revelations about the data collection practices of Cambridge Analytica. The firm sought to construct psychographic profiles of voters through an app that culled profile details from Facebook users as well as tens of millions of their friends, who may not have been aware their information was collected in the first place.
For the U.S. government, the question is whether this activity – and Facebook’s privacy practices when it comes to third-party apps – violated a 2011 settlement with the FTC over another privacy mishap related to the way it collects consumers’ information. Facebook stopped allowing developers to collect information about app users’ friends in 2015.
The FTC also suggested Monday that it’s studying whether Facebook’s practices ran afoul of a data-use agreement between the United States and Europe, called the Privacy Shield, which protects Europeans’ data stored in the United States.
“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” said Tom Pahl, the acting director of the agency’s Bureau of Consumer Protection, in a statement Monday. “Accordingly, the FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices.”