Facebook (FB) shares continued their decline amid news the social media juggernaut is being investigated by the FTC for improperly sharing private data on more than 51 million users without their consent. (See more: Facebook Shares Fall After Data Leak Bombshell.)
Facebook stock plunged 8% on Monday, posting its worst one-day decline in six years, wiping nearly $40 billion off its market value. FB closed today at $168.15 a share, down 2.56%, on unusually heavy volume of 129.8 million shares. Average daily trading volume is 22 million shares. Facebook's data breach scandal had a trickle-down effect on rivals Twitter Inc. (TWTR) and Snap Inc. (SNAP), whose shares got crushed today as FB spiraled downward.
Twitter and Snap Stock Plunged
Twitter stock tumbled 10.4%, while Snap stock closed down 2.56%.
While it may seem counterintuitive that Facebook's competitors are not benefiting from its current woes, concerns about data and privacy breaches on social media networks like Twitter and Snap are a major concern, and FB's latest scandal has shone a glaring spotlight on the issue.
Facebook is accused of allowing data analysis firm Cambridge Analytica – which was linked to Donald Trump's 2016 presidential campaign – to access personal data on 51.3 million FB users without their consent. The Federal Trade Commission (FTC) has launched an investigation into the matter, as have authorities in the U.K., where Cambridge Analytica is based.
FB Could Be Fined $40,000 a Day Per Violation
Facebook could be fined $40,000 a day per violation if the FTC determines that it violated a 2011 consent decree under which FB agreed to obtain permission and notify users before sharing their data with third parties, Bloomberg reported.
"The FTC should give this situation a through look to determine if there’s a decree violation," Gene Kimmelman, a former chief counsel of the Department of Justice’s antitrust division, said in a statement. "The FTC should use all of its power to prevent this from ever happening again."
Facebook denied any wrongdoing in a statement and dismissed "any suggestion of violation of the consent decree." (See also: WhatsApp Co-founder Joins "#DeleteFacebook" Chorus Amid Privacy Breach.)