Facebook (FB) stock sank on Monday after the Federal Trade Commission announced it was investigating the company’s data privacy practices and a number of privacy groups filed lawsuits.
The FTC confirmed that it was looking into the social media giant’s protection of user data, saying it takes reports that data was improperly obtained “very seriously.”
The company’s stock initially plummeted on the news, falling more than 5 percent. By 1:00 p.m. the stock had bounced back, but was still down nearly 2 percent. Shares of Facebook are down more than 15 percent from a high of $185 earlier this month.
Facebook said in a statement on Monday that the company remains “strongly committed” to protecting people’s information and that it welcomes the opportunity to answer the FTC’s questions.
In a statement, the FTC said: “[T]he 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.”
Facebook lawsuits
Legal actions against Facebook have been mounting since last week.
The government watchdog group Common Cause filed a complaint alleging that Cambridge Analytica, which is headquartered in the United Kingdom, broke laws around foreign involvement in U.S. elections.
Also on Monday, a group of 37 state attorneys general issued a demand for Facebook to explain its data protection practices.
“As we look into what happened with Facebook and Cambridge Analytica, our top priority is determining whether Facebook violated their own ‘Terms of Service’ or data breach notification laws,” Pennsylvania AG Josh Shapiro, who is leading the coalition, said in a statement.
Cook County in Illinois filed suit against Facebook and Cambridge Analytica on Friday, claiming the companies violated state fraud law.
Facebook settled with the FTC in 2011 after the agency alleged that the social-media giant misled its users by making data public that it had promised would be private. As part of the settlement, Facebook agreed to ask for users’ permission before sharing their data more broadly than their privacy settings specified.
Privacy groups questioned whether Facebook ran afoul of that agreement after it was revealed that 50 million users’ data was obtained without their consent by the data mining firm Cambridge Analytica. Legislators have called on CEO Mark Zuckerberg to testify before Congress, and the attorneys general of three states have launched investigations.
The Associated Press contributed to this report.
© 2018 CBS Interactive Inc.. All Rights Reserved.
