FTC launches probe into Facebook’s privacy practices
Possible privacy violation around consent decree signed in 2011; Pep Boys pulls ads
If Facebook was hoping that Monday would bring a reprieve from all the controversy in the wake of the Cambridge Analytica scandal last week, Chief Executive Mark Zuckerberg and Co. had another thing coming.
The Federal Trade Commission said Monday that it has launched an investigation into Facebook’s privacy practices and would determine if Facebook violated a consent decree it signed in 2011 in which it agreed to protect the privacy of its users. The investigation stems from Facebook acknowledging that data collection firm Cambridge Analytica gained access to more than 50 million Facebook users’ personal data and that information was used in the targeting of political ads
during the 2016 presidential campaign.
“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” said Tom Pahl, acting director of the Federal Trade Commission’s bureau of consumer protection, in a statement announcing the start of what the FTC called a nonpublic investigation of Facebook. “The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook.”
In response to the FTC’s investigation announcement, Rob Sherman, Facebook’s deputy chief privacy officer said in a statement, “We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have.”
Last week, Zuckerberg appeared contrite as he said in a Facebook post that the company “made mistakes” in its handling of its users data and that, in the end, he remains responsible for what takes place on and behind the scenes of Facebook’s platform. Zuckerberg also said he would be “happy” to appear before Congress to discuss the Cambridge Analytica matter and Facebook’s privacy standards.
Along with the FTC launching an investigation, Facebook also saw one of its advertisers on Monday decide that enough was enough.
Automobile supply
company Pep Boys said it was suspending its ads with Facebook because it doesn’t believe the social media giant can guarantee the security of the data of its users.
“Customer trust and the protection of consumer data are of utmost importance to Pep Boys,” said Danielle Porto Mohn, Pep Boys’ chief marketing officer, in a statement given to this news organization. “We are concerned about the issues surrounding Facebook and have decided to suspend all paid media on the platform until the facts are out, there is clarity on outstanding investigations, and corrective actions have been taken.”
Pep Boys’ move to suspend its ads on Facebook follows on the heels of a similar action taken by internet company Mozilla. The developer of the Firefox browser said last week that it would no longer advertise with Facebook for the forseeable future.
On Wall Street, investors initially reacted to the FTC investigation of Facebook by sending the company’s shares down as much as 6.5 percent in Monday’s market session. By the end of trading, Facebook had recovered to close with a gain of 0.4 percent, at $160.06.
Still, the Cambridge Analytica matter and its aftermath have put a beating on Facebook’s stock price over the last week, as shares are down 13.5 percent since closing at $185.09 on March 16.