Facebook draws probe by US privacy watchdog and Congress over data scandal

Data of 50 million users winds up in analytics company which helped elect Trump 

PUBLISHED : Wednesday, 21 March, 2018, 3:09am
UPDATED : Thursday, 12 April, 2018, 8:36am

Facebook is drawing scrutiny from the main US privacy watchdog and members of Congress over how the personal data of 50 million users was obtained by a data analytics firm that helped elect US President Donald Trump.

The US Federal Trade Commission is probing whether Facebook violated terms of a 2011 consent decree over its handing of user data that was transferred to Cambridge Analytica without their knowledge, according to a person familiar with the matter. The commission will be sending a letter to the company, according to a second person with knowledge of the matter.

Facebook officials have also tentatively agreed to brief members of the House Judiciary Committee, said a congressional official familiar with the talks. 

A Facebook spokesman confirmed that the company would hold a town hall on Tuesday, where a deputy general counsel would answer questions about the Cambridge Analytica developments.

Logistics for the meeting are still being worked out, including whom from the company will be involved in the briefing, the official said. The Senate Judiciary Committee also is in the process of scheduling a briefing from Facebook, said George Hartmann, a spokesman for Chairman Chuck Grassley.

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As the lead US agency for enforcing companies’ privacy policies, the FTC could fine the company millions of dollars if it finds Facebook violated the 2011 consent decree.

“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 US Justice Department’s antitrust division, said in a statement. “The FTC should use all of its power to prevent this from ever happening again.”

Separately, the European parliament on Tuesday invited Facebook chief Mark Zuckerberg to speak following revelations that the analytics firm which helped Trump had harvested data on 50 million users.

The parliament and the European Commission, the 28-nation EU executive, have already called for an urgent investigation into the scandal.

White House spokesman Raj Shah said on Tuesday that Trump “believes that Americans’ privacy should be protected” and supports federal investigations into the incident. 

“If Congress wants to look into the matter or other agencies want to look into the matter, we welcome that,” Shah said on Fox News.

Asked if Zuckerberg should testify, Shah demurred. “Without knowing the specifics, it’s difficult to talk about whether an individual should testify,” he said.

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The EU parliament’s civil liberties committee on Monday sent a letter to Facebook asking it to testify before the body, a parliamentary spokesperson said.

EU Justice Commissioner Vera Jourova, who has called the breach “horrifying”, was seeking to meet with Facebook during her visit this week to Washington.

Her office said she had also called on independent European data protection authorities who are meeting Tuesday in Brussels to probe the growing Facebook scandal.

In a statement, Cambridge Analytica said it “strongly” denied “false allegations” in the media and said that the Facebook data at the centre of the scandal was not used as part of services provided to the Trump campaign.

Under the terms of the 2011 settlement, Facebook agreed to get user consent for certain changes to privacy settings as part of its resolution of federal charges that it deceived consumers and forced them to share more personal information than they intended. 

That complaint arose after the company changed some user settings without notifying its customers, according to an FTC statement at the time.

If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company more than US$40,000 a day per violation.

Facebook previously said in a statement it rejected “any suggestion of violation of the consent decree.”

“We respected the privacy settings that people had in place,” Rob Sherman, Facebook’s deputy chief privacy officer, said in an emailed statement. “Privacy and data protections are fundamental to every decision we make.”

Facebook stock has taken a hit, falling 5.5 per cent on the day to trade at US$163.08 on Tuesday. That followed a drop of 6.8 per cent on Monday that was the company’s largest tumble since March 2014.