US trade commission investigating Facebook in use of personal data by firm tied to Trump

Facebook CEO Mark Zuckerberg speaking at the F8 summit in San Francisco, California.
Facebook CEO Mark Zuckerberg speaking at the F8 summit in San Francisco, California.PHOTO: AFP

NEW YORK (NYTIMES) - The Federal Trade Commission (FTC) has opened an investigation into whether Facebook violated an agreement with the agency on data privacy, after reports that information on 50 million users was improperly obtained by the political consulting firm Cambridge Analytica, according to a person with knowledge of the inquiry.

The investigation, started in recent days, adds to the mounting pressure on Facebook about its handling of the data.

Cambridge Analytica used the information to help President Donald Trump's presidential campaign profile voters during the 2016 election.

The scrutiny of the company now extends from state capitals to Europe. Attorneys-general in Massachusetts and New York are investigating Facebook's handling of personal data, and the British Parliament has called for a hearing with Mark Zuckerberg, the company's chief executive.

Several senators have also called for him to appear in Washington.

Adding to concerns about the company is the impending departure of Alex Stamos, Facebook's chief security officer.

That change, reported on Monday by The New York Times, reflects heightened leadership tension at the company.

The buildup of news has already hurt Facebook's stock. The company's shares were down more than 5 per cent in midday trading on Tuesday, after falling sharply Monday as well.

 

The FTC investigation is connected to a settlement the agency reached with Facebook in 2011.

The agency had accused the company of deceiving customers "by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public," according to a statement at the time.

Among several violations, the FTC found that Facebook told users that third-party apps on the social media site, like games, would not be allowed to access data. But the apps, the agency found, were able to obtain almost all personal information about a user.

The agency's action against Facebook in 2011 was considered a landmark in privacy enforcement.

The company could face fines of US$40,000 (S$52,000) a day per violation if the agency finds it violated their settlement.