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Facebook under fire as prosecutors, Congress confirm investigations

March 26, 2018 GMT

Congress, trade regulators and state prosecutors all announced probes into Facebook Monday over reports of privacy breaches, sending the internet giant’s stock sliding as the company struggles to contain a growing scandal.

The U.S. Federal Trade Commission confirmed it is investigating whether Facebook has breached a 2012 privacy settlement, while European officials demanded promises of better behavior in the future.

Sen. Charles E. Grassley, chairman of the Judiciary Committee, invited Facebook founder Mark Zuckerberg to explain his company’s actions at an April 10 hearing on social media and privacy, and more than three dozen state attorneys general fired off a letter to Mr. Zuckerberg asking for more details about reports that 50 million users’ data was harvested and used by a British political consultancy.

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“Our trust has been broken,” the attorneys general said in their letter.

The company’s practices have come under scrutiny after a British news report exposed a political consultancy that did work for the 2016 Trump campaign, and which had access to a trove of data on tens of millions of users.

Facebook said the data was supposed to have only been shared with an academic researcher, but it ended up in the hands of Cambridge Analytica.

The company said Monday it will answer the questions it faces.

“We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have,” said Rob Sherman, Facebook’s deputy chief privacy officer.

Mr. Zuckerberg last week acknowledged a “breach of trust” from the controversy and promised new steps to prevent a repeat.

Facebook’s stock on Monday continued a slide which has gone on nearly uninterrupted since the first reports of privacy problems 10 days ago. The stock, which was at $185.23 on March 16, stood at $155.89 just after 1 p.m. Monday.

The FTC investigation had been rumored last week but the agency acknowledged it publicly on Monday.

“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,” Tom Pahl, acting director of the agency’s consumer protection bureau, said in a statement.

The probe will cover not only federal trade laws but will also look at whether Facebook breached a 2012 settlement it reached with the FTC after the company was accused of breaking privacy promises.

That settlement required Facebook to be more honest with its users about their data and its uses.

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