Facebook Has 99 Problems and the FTC Is One

March 26, 2018

The Federal Trade Commission officially launched an investigation into Facebook’s data practices Monday.

The agency is exploring whether the social media platform violated an agreement from back in 2011 by failing to abide by its privacy promises.

But Axios managing editor Kim Hart says the matter isn’t cut and dry.

“Here’s the problem -- there are no real rules on the books that dictate how data from a company like Facebook can be shared or sold or used,” she said in an interview on Cheddar.

“As long as they are abiding by the privacy policies that they put out and the privacy standards that they tell consumers that they’re going to use, they’re in pretty good stead.”

Seven years ago, Facebook reached a settlement with the FTC over allegedly tricking users into believing that they could keep their data on the platform private when it was in fact open to third party apps.

Under that agreement, Facebook was required to “obtain periodic assessments of its privacy practices by independent, third-party auditors for the next 20 years,” according to an official statement from the FTC.

The increased scrutiny comes at a time when Facebook’s popularity is waning. A recent Reuters/Ipsos poll shows that just 41 percent of Americans trust the company will protect their privacy, compared to 66 percent who trust Amazon and 62 percent for Google.

A separate Axios study found that Facebook’s favorability fell by 28 points in just the past five months.

“It’s a pretty stunning drop that we saw,” said Hart. “It fell twice as much as the other tech giants did.”

This onslaught of negative coverage comes after news that data company Cambridge Analytica harvested data on tens of millions of Americans off of Facebook without their permission. It then sold that information to President Trump’s campaign team in 2016.

Since the revelation, Facebook shares have fallen by 13 percent. Initial news of the FTC investigation sent shares down an additional 6 percent Monday, but they recovered for a slight gain by the end of the day.

For the full interview, click here.