The social network’s stock dipped another 5% yesterday following the news that the US Federal Trade Commission (FTC) plans to launch an investigation into their most recent data scandal.
The investigation hinges around whether Facebook’s relationship with Cambridge Analytica (an app that used Facebook user data to influence voter behavior) violates a 2011 agreement over how they’re allowed to share their users’ data.
In 2011, the FTC accused Facebook of engaging in “unfair and deceptive practices” by making user data that users considered to be private, public.
The claim included the charge that Facebook had wrongfully given data to advertisers and outside application developers.
Facebook went on to sign a “consent decree” with the FTC, agreeing not to share its users’ data without consent and paid no fines.
Which will not be the case if found guilty
Sources say if the FTC finds Facebook guilty of violating the 2011 agreement, Facebook could be fined $40k… for each violation.
Meaning if 50m users actually had their data sold to Cambridge Analytica, the fines could amount to trillions of dollars — adding insult to injury with the $90B in market value Facebook’s already lost since the scandal. More updates to come on this topic.