By John D. McKinnon
WASHINGTON -- The Federal Trade Commission is probing Facebook
Inc. over the use of personal data by an analytics firm tied to
President Donald Trump's campaign, a person familiar with the
matter said.
The FTC is looking into whether Facebook violated terms of an
earlier consent decree when data of up to 50 million of its users
was transferred to Cambridge Analytica, this person said.
However, a person close to Facebook said that the agency's probe
at this point doesn't appear to be a formal investigation, and the
company is expecting to receive a letter from the FTC with
questions.
"We remain strongly committed to protecting people's
information," said Rob Sherman, Facebook's deputy chief privacy
officer, in a statement. "We appreciate the opportunity to answer
questions the FTC may have."
The social-media firm's shares fell 6.1% in morning trading to
$162.05
The probe was first reported by Bloomberg.
The FTC said in a statement: "We are aware of the issues that
have been raised, but cannot comment on whether we are
investigating. We take any allegations of violations of our consent
decrees very seriously."
The FTC statement went on to cite a 2012 privacy case against
Alphabet Inc. unit Google, in which the company was fined $22.5
million for violating terms of its consent decree.
Facebook's consent decree was announced in 2011 and approved in
2012. The social-media giant agreed in its decree to get user
consent for collecting personal data and sharing it with
others.
Facebook was charged with deceiving consumers by telling them
they could keep their information on Facebook private, but then
repeatedly allowing it to be shared and made public. The settlement
required Facebook to give consumers clear and prominent notice and
obtaining their express consent before sharing their information
beyond their privacy settings. It also agreed to maintain a
comprehensive privacy program to protect consumers'
information.
If the FTC eventually finds that Facebook violated its consent
decree, the firm could face millions of dollars in fines as well as
harm to its reputation with users.
Lawmakers in Washington and in the U.K. also are demanding more
information from the company, in the latest in a string of
regulatory headaches for Facebook as well as other big tech
firms.
Last week, Facebook said it suspended the firm Cambridge
Analytica from its platform following reports the firm had violated
Facebook policies that govern how third-party developers can deploy
user data they obtained from the company.
The firm, which worked for Republican presidential candidates
including Mr. Trump and Sen. Ted Cruz of Texas during the 2016
campaign, was financed in part by a major Republican donor. It was
founded on the premise of using cutting-edge social science to
better target voters in political campaigns.
"Facebook, Google, and Twitter have amassed unprecedented
amounts of personal data and use this data when selling
advertising, including political advertisements. The lack of
oversight on how data is stored and how political advertisements
are sold raises concerns about the integrity of American elections
as well as privacy rights," said Sens. Amy Klobuchar (D., Minn.)
and John Kennedy (R., La.) in a joint statement on Monday.
Facebook said it had learned in 2015 that Aleksandr Kogan, a
psychology professor at the University of Cambridge in the U.K.,
broke its data policies when he shared user data gleaned from his
personality-prediction app, "thisisyourdigitallife," to third
parties including Cambridge Analytica and Christopher Wylie, who
runs a company called Eunoia Technologies Inc.
About 270,000 people downloaded the app, giving Mr. Kogan access
to information such as the cities they lived in, the content they
had liked, or information about their friends, Facebook Deputy
General Counsel Paul Grewal wrote in a blog post. According to a
report in the New York Times, as many as 50 million Facebook users
were swept up in the data collection.
On Monday, Facebook said it hired a digital forensics firm,
Stroz Friedberg, to do a "comprehensive audit" of Cambridge
Analytica, which agreed to give "complete access" to its servers
and systems.
Facebook also asked Messrs. Kogan and Wylie to agree to an
audit. Mr. Kogan provided a verbal agreement, while Mr. Wylie
declined. Facebook said the audits were part of a broader review
conducted by the company to determine whether the parties deleted
the user data as they certified some years ago.
"If this data still exists, it would be a grave violation of
Facebook's policies and an unacceptable violation of trust and the
commitments these groups made," Facebook said.
A Cambridge Analytica spokesman said in a statement that its
political division didn't use Facebook data collected by Mr.
Kogan's company. The firm said that it deleted all data it received
after it became clear that Mr. Kogan violated Facebook's
policies.
A Facebook spokesman said the parties, including Cambridge
Analytica, entered legal agreements on the deletion, but Facebook
couldn't independently verify that it was scrubbed. The company has
since changed its data policies so developers can't easily gather
as much data about Facebook users, it said.
Byron Tau and Deepa Seetharaman contributed to this article
Write to John D. McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
March 20, 2018 12:51 ET (16:51 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Feb 2024 to Mar 2024
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Mar 2023 to Mar 2024