Facebook Shares Move Lower as Data Breach Probe Broadens

Leroy Wright
July 4, 2018

Details of the investigation beyond the FTC's work have not been publicly released but sources The Washington Post spoke with said the emphasis of the expanded investigation has been about what Facebook has publicly revealed about what it shared with Cambridge Analytica and if those representations are accurate. The Post suggests that the focus of this investigation is on how truthful Facebook has been about its disclosures. Foremost among these tools is enforcement action against companies that fail to honor their privacy promises, including to comply with Privacy Shield, or that engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act.

Facebook acknowledged today it was facing multiple inquiries from U.S. and British regulators about the major Cambridge Analytica user data scandal.

"The SEC has described the investigation as 'The Facebook Matter, ' according to two people who have seen related documents", the report suggested.

A Facebook spokesperson told Reuters late on Monday that it is co-operating with officials in the U.S., United Kingdom and beyond.

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The Post said the probe will look at why Facebook didn't inform users or investors earlier. The quiz creator, Aleksander Kogan, then gave that data to Cambridge Analytica, which had never gotten user consent to use the data in the first place.

The news of this expanding federal probe creates more problems and worries for Facebook that has continued to fall into a rabbit hole of privacy and security controversies since March (a fresh one arrived this evening).

The Justice Department has been investigating Facebook's involvement with now defunct political consulting firm Cambridge Analytica.

The decline of Facebook's shares came as most broader market indices were trading slightly higher during the shortened trading session heading into the July 4 holiday in the US, although the tech-heavy Nasdaq was down 0.1% in early trading.

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