According to Reuters, Facebook Inc. (NASDAQ: FB) share value fell as low as $149.02 on Monday as the U.S. Federal Trade Commission announced its investigation on how the social network allowed data of 50 million users to get into the hands of a political consultancy. Significant public interest sprung the FTC into action, pressure from lawmakers in Europe and the U.S. for CEO Mark Zuckerberg to explain how the social media giant handles user data.
“Facebook’s failure to protect confidential user information likely violated specific legally binding commitments, but also basic norms and standards,” said U.S. Democratic Senator Richard Blumenthal, a member of the Senate Commerce, Science, and Transportation Committee.
“FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” the regulator said in a statement. “Today, the FTC is confirming that it has an open non-public investigation into these practices.” “We remain strongly committed to protecting people’s information,” Facebook Deputy Chief Privacy Officer Rob Sherman said in a statement on Monday. “We appreciate the opportunity to answer questions the FTC may have.”
A bipartisan coalition of 37 state attorneys general wrote to Facebook on Monday, inquiring on the company’s role in the manipulation of user’s data by Cambridge Analytics and its policies and procedures in place to protect private data. The Commerce Committee, U.S. House Energy, and U.S. Senate Commerce Committee have formally requested Zuckerberg to appear at a congressional hearing.
Last week, Zuckerberg apologized for mistakes the company made and promised to restrict developers’ access to user data as part of a plan to protect privacy. “The was a breach of trust, and I’m sorry we didn’t do more at the time,” Zuckerberg said in the ads. “We are now taking steps to make sure this doesn’t happen again.”
Germany’s justice minister declared that Facebook’s promises were not sufficient. “In future we will have to regulate companies like Facebook much more strictly,” Katarina Barley said after talks to which she summoned Facebook executives including European public affairs chief Richard Allan.
Facebook share value closed green at $160.06 on the day as investor interest rose and short sellers began to cover