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Facebook stock sinks after report of federal probe into data breach

Facebook stock sinks after report of federal probe into data breach
© Greg Nash

Facebook’s stock price fell deeper Tuesday after reports of expanding U.S. and U.K. probes into its role in the unauthorized use of personal information by a Trump-connected data firm.

The social media company has been under fire since The New York Times and The Observer of London reported that Cambridge Analytica, a firm hired by President TrumpDonald TrumpTrump's Facebook ban to stay in place, board rules Trump allies launching nonprofit focused on voter fraud DOJ asks for outside lawyer to review Giuliani evidence MORE’s 2016 campaign, used personal data from roughly 50 million Facebook users for unauthorized political purposes. The firm reportedly received the data from a researcher.

Shares of Facebook were down 5.7 percent by Tuesday afternoon, falling as low as $162, a nearly $10 drop. U.S. stocks on the whole gained throughout the day.

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Bloomberg News reported shortly before Tuesday’s opening bell that the Federal Trade Commission (FTC) is investigating Facebook for potentially violating a 2011 agreement with the agency regarding uses of customer data.

“We are aware of the issues that have been raised but cannot comment on whether we are investigating," an FTC spokesperson said in an emailed statement. "We take any allegations of violations of our consent decrees very seriously as we did in 2012 in a privacy case involving Google.”

Facebook stock also sunk 6.7 percent on Monday, the first day of trading after reports of Cambridge Analytica’s use of user data. Facebook is under pressure to explain how the researcher who provided the data was able to exploit privacy settings to obtain data from tens of millions of users without their permission.

After the report, Facebook announced that it had suspended Cambridge Analytica from its platform and was conducting an internal review.

“We are in the process of conducting a comprehensive internal and external review as we work to determine the accuracy of the claims that the Facebook data in question still exists. That is where our focus lies as we remain committed to vigorously enforcing our policies to protect people’s information,” Paul Grewal, Facebook deputy general counsel, said in a statement on Sunday.

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Cambridge Analytica worked to help the Trump campaign identify and mobilize potential voters during the 2016 presidential contest.

U.K. news broadcaster Channel 4 also posted Monday videos from an investigative report in which Cambridge Analytica executives discuss using bribes and sex workers to entrap politicians.

In the report, company executives described how they influenced online discussions and narratives about the elections in which their clients compete.

U.S. and U.K. lawmakers have called on Facebook CEO Mark ZuckerbergMark Elliot ZuckerbergOversight Board decision on Trump will raise more questions than answers Wisconsin passes law requiring schools teach students about Holocaust and other genocides Apple revenue up 54 percent for start of 2021 MORE to testify before Congress and Parliament, and several state attorneys general have launched their own probes.