FTC To Probe Facebook, Zuck 'Invited' To Testify

Facebook Inc. is heading toward its worst month since May 2013 after an analyst report warned of a temporary pullback in advertising and the FTC confirmed it’s investigating the social network’s privacy practices.

According to Bloomberg, the stock fell 1.4 percent to $157.14 at 2:35 p.m. Monday in New York, bucking the broader positive direction of the markets. Earlier, the shares fell as much as 6.5 percent, erasing about $100 billion in market value in the past 10 days.

Facebook Chief Executive Officer Mark Zuckerberg is facing one of his worst crises in public confidence yet after reports that Cambridge Analytica, a firm that worked for U.S. President Donald Trump in the 2016 election campaign, improperly obtained and then retained data from 50 million Americans.

The Federal Trade Commission confirmed Monday that it has an open non-public probe into Facebook’s privacy practices, saying it “takes very seriously” recent reports about misuse. Bloomberg reported last week that the FTC is looking into whether Facebook violated terms of a 2011 consent decree over its handing of user data that was transferred to Cambridge Analytica without their knowledge.

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

Later on Monday, Zuckerberg was was invited to testify before the U.S. Senate Judiciary Committee on April 10 as questions pile up over the social network’s data-privacy practices. Facebook said it has received the invitation and is reviewing it. Two other congressional committees also have invited Zuckerberg to testify, and last week he said said he’d agree if he is the right person to appear.

Even if some advertisers temporarily pull back on Facebook spending, Sebastian said he expects the move to be short lived “as there are few channels available that can match Facebook’s return on ad spend.”