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FTC officially puts Facebook under federal investigation
- Today, the FTC began a non-public investigation into Facebook, Inc. in response to the recent Cambridge Audio Audio Analytica scandal.
- Since the investigation is non-public, this may be the first and last time we hear official news about its progress.
- Facebook is still suffering from massive drops in its stock and the trend of users leaving the social network due to the scandal.
The Cambridge Audio Analytica scandal is probably keeping Mark Zuckerberg up at night. After he posted a Facebook status update taking full responsibility for the misuse of Facebook user information, he put out full-page ads in major newspapers over the weekend where he again expressed his remorse.
But apologies and proposed policy updates aren’t enough in this case, as today the Federal Trade Commission officially announced that it has opened a non-public investigation into Facebook and its privacy practices.
Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection, issued a statement, reprinted here in full:
The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers. 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. Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements. 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.
Because the investigation is specifically labeled as “non-public,” we could never hear about this again. According to the FTC itself, non-public investigations are designed to “protect both the investigation and the individuals and companies involved,” and if any laws were violated, the agency could offer a chance to voluntarily comply to a consent order. If the company complies, the company “need not admit that it violated the law,” but it “must agree to stop the disputed practices.”
In theory, this could mean that the FTC will tell Facebook, “Hey, don’t do this anymore,” Facebook could say, “Ok, sure,” change its policies, and that’s that. No public statements needed, no disclosures of any kind.
Investigations like this could finish without any admission of wrongdoing on Facebook's part.
But even if that’s how this plays out, the scandal has already done significant damage to the brand. Facebook stock is plunging at insane speeds, the “#deleteFB” tag is still going strong on Twitter, and even a co-founder of Facebook-owned WhatsApp says you should delete your account. It’s going to take a lot of positive press for Facebook to recover from this mess.