In this April 18, 2017, file photo, conference workers speak in front of a demo booth at Facebook’s annual F8 developer conference, in San Jose, California. Facebook is facing the most serious crisis in its 14-year history as it deals with fallout from a major leak of user data to political consultants associated with the 2016 Trump campaign. (AP Photo/Noah Berger, File)

NEW YORK (AP) — The Federal Trade Commission is investigating Facebook’s privacy practices following a week of privacy scandals including whether the company engaged in “unfair acts” that cause “substantial injury” to consumers.

Facebook’s stock, which already took a big hit last week, plunged as a result.

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.

News outlets have reported on the FTC investigation last week, but the FTC hadn’t confirmed it until Monday. Facebook reached a settlement with the FTC in 2011 offering privacy assurances.

Here’s a look at the scandal and what it means.

What’s going on?

The U.K.-based data-mining firm Cambridge Analytica has been accused of lifting the Facebook profiles of more than 50 million users without their permission in order to manipulate elections. A former employee of the firm, Christopher Wylie, played a role in that action, and later told his story to journalists.

The crisis has renewed questions about Facebook’s ability to protect the privacy of its users while also exploiting their personal details to fuel its lucrative advertising business. It has also deepened concerns about the social media network’s ability to avoid being exploited to spread propaganda and sway elections.

Authorities in both the U.S. and the U.K. are investigating both Facebook and Cambridge Analytica. Facebook shares have fallen and some users are contemplating deleting their accounts.

What did Cambridge Analytica do?

Wylie says the firm sought Facebook information in order to build psychological profiles on a large portion of the U.S. electorate. He said the company was able to amass the database quickly with the help of an academic, Aleksander Kogan, who developed a Facebook app called “This is Your Digital Life” that appeared to be a personality test.

That app vacuumed up information from users who gave the app permission to access their accounts — as well as additional data from their Facebook friends.

Kogan paid about 200,000 people to take part; tens of millions of their friends were also caught in the data dragnet.

How has Cambridge Analytica responded?

Cambridge Analytica has denied wrongdoing, and the firm said it deleted any data it received from Kogan and denied using any Facebook data in its political work. Facebook, however, said it recently learned from journalists that Cambridge Analytica may have kept some of the data, spurring an investigation.

Kogan said he has been scapegoated by both Cambridge and Facebook. He says the data firm approached him for the project and assured him that everything he did was legal.

What’s the connection to the Trump campaign?

Federal election records show that the Trump campaign paid Cambridge Analytica roughly $6 million. But the campaign has denied using the firm’s data, saying it relied on the Republic National Committee for its voter information.

Cambridge Analytica was backed by the conservative billionaire Richard Mercer, a hedge-fund manager who supported the Trump campaign. At one point, the firm’s vice president was Steve Bannon, who later became Trump’s campaign chairman and White House adviser.

Trump’s former national security adviser, Michael Flynn, disclosed an advisory role with Cambridge Analytica last August. But the firm’s parent company, Strategic Communication Laboratories, later said that position never materialized. Special counsel Robert Mueller is scrutinizing the connections between Trump’s campaign and Cambridge Analytica.

Wylie, the whistleblower who worked for Cambridge from 2013 to 2015, said his team spoke to Americans in focus groups to identify deep-seated concerns and tested ways to tap into those fears through social media. He claims the slogans they developed later became the catchphrases of the Trump campaign, including “drain the swamp” and “build the wall.”

Cambridge Analytica CEO Alexander Nix was caught bragging about the firm’s pivotal role in the Trump campaign on a sting video from the U.K.’s Channel 4. He said Cambridge handled “all the data, all the analytics, all the targeting” for the campaign.

Why are people mad at Facebook?

The Cambridge Analytics fiasco appears to have crystallized the anxiety many people feel about Facebook’s enormous sway over daily life and its massive data trove.

A sell-off in Facebook shares reflects fear that the social network may face new regulations that could hurt profits — or that advertisers and users will sour on it.

A U.K. parliamentary media committee is investigating how Facebook uses data, and has summoned CEO Mark Zuckerberg to testify. Various U.S. congressional committees are also seeking answers, although Democrats and Republicans have disagreed on what steps to take. Privacy advocates have asked the Federal Trade Commission to investigate as well.

The hashtag #deletefacebook has been trending. Brian Acton, the co-founder of WhatsApp, which was acquired by Facebook four years ago for $19 billion, has joined the cause. But there are no signs, so far, that users — or advertisers — are abandoning Facebook in droves.

How is Facebook addressing the crisis?

Facebook CEO Mark Zuckerberg is promising to do a better job protecting user data following reports that a political consultant misused the personal information of millions of the company’s subscribers. The fact is, European regulators are already forcing him to do so.

A similar data breach in the future could make Facebook liable for fines of more than $1.6 billion under the European Union’s new General Data Protection Regulation, which will be enforced from May 25. The rules, approved two years ago, also make it easier for consumers to give and withdraw consent for the use of their data and apply to any company that uses the data of EU residents, no matter where it is based.

Alexandra Olson contributed to this report.


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