Social media platform Facebook, Inc. FB is reportedly facing a criminal investigation into deals it struck with technology companies, according to The New York Times.
What Happened
A grand jury in New York issued subpoenas to at least two unnamed "prominent" tech manufacturers who made agreements with Facebook, sources told NYT. As part of the reported agreements with Facebook, tech companies were given broad access to view information on Facebook users, including their friends, contact information and other data, sometimes without permission, the report said.
When the grand jury investigation began and what it is focusing on are unclear, according to NYT.
Why It's Important
Facebook responded in a statement to CNBC and said it is cooperating with investigators and has already "provided public testimony." A grand jury investigation is "serious" and suggests the company as a long way to go to regain the trust of users after two years of privacy and security-related scandals, CNBC said.
What's Next
Facebook CEO Mark Zuckerberg pledged last week to pivot Facebook's core purpose from being a public platform to one that focuses more on personal and private connections. It is not yet clear what impact, if any, the latest legal allegations will have on the social media company's objectives.
Facebook's stock traded down 2 percent at $169.88 per share Thursday morning.
Related Links:
Facebook's Zuckerberg Presents 'Privacy-Focused Vision'
Aegis Capital's Anthony Says Facebook Has A Credibility Problem
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