Zuckerberg's losses on Facebook data scandal hit $10bn

Risingbd Desk: The Federal Trade Commission has an open investigation into Facebook's growing privacy scandal it revealed Monday - escalating a crisis which has now personally cost Mark Zuckerberg $10 billion.

The regulator's acting director, Tom Pahl, made the announcement in a statement which immediately send Facebook's share price plunging.

He also raised the prospect of a massive fine for Zuckerberg's social network because it had entered into a consent decree in 2011 about the use of personal data and any breach of that can be punished by the regulator.

If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company thousands of dollars a day per violation, which could add up to billions of dollars.

The move represents a huge blow to Facebook, which has been plunged into crisis by the disclosure that Cambridge Analytica harvested the personal data of 50 million American users which was then used by the Trump campaign before the 2016 election to micro-target advertising.

Shares in Facebook fell from an opening price of $160.82 to as low as $150.36 in the minutes after the announcement was made although they rebounded to close down only slightly.

They have now gone down from $185.09 on the day before the scandal begun, a personal loss to Zuckerberg of $10 billion.

The Monday morning move by the federal regulator is the most significant threat to Facebook to emerge out of its data-harvesting scandal.

The FTC has powers to fine, prosecute and regulate Facebook in its home in the United States.

Pahl said: '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.'

The latest blow to the social network was the revelation that it had been scraping call data from Android phones for years, meaning that people who had the Facebook app on their phone were handing over the numbers they called and texted and received replies from.

The disclosures are at the center of mounting political scrutiny in Washington, where senators have already demanded that Zuckerberg testify under oath about his firm's privacy practices.

He tried to dodge that last week, claiming Facebook sent the people with the most information to Capitol Hill when it testified but that received little welcome from politicians of both parties.

On Sunday Zuckerberg took out full-page ads in nine major US and British publications to apologize for the Cambridge Analytica scandal.

The ads, apologizing for a data breach that leaked details from 50 million Facebook users, ran in the New York Times, Washington Post, and Wall Street Journal in the US.

They also ran in the Mail on Sunday, The Sunday Times, The Observer, Sunday Mirror, Sunday Express, and Sunday Telegraph.

Source: Daily Mail


risingbd/Dhaka/March 27, 2018/AI