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F.T.C. Investigating Facebook in Use of Personal Data by Firm Tied to Trump F.T.C. Investigating Facebook in Use of Personal Data by Firm Tied to Trump
(35 minutes later)
The Federal Trade Commission 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. WASHINGTON — The Federal Trade Commission 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 against Facebook in the United States and in the United Kingdom about its handling of the data. Cambridge Analytica used the information to help President Trump’s presidential campaign profile voters during the 2016 election. The investigation, started in recent days, adds to the mounting pressure against Facebook about its handling of the data. Cambridge Analytica used the information to help President Trump’s presidential campaign profile voters during the 2016 election.
The F.T.C. and Facebook reached a settlement in 2011 after the agency 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. 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 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 percent in midday trading on Tuesday, after falling sharply on Monday as well.
The F.T.C. 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 F.T.C. 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.Among several violations, the F.T.C. 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 data on the 50 million users was harvested in 2014 by an outside researcher, Aleksandr Kogan. Mr. Kogan, a professor at Cambridge University, paid users small sums to take a personality quiz and download an app, which collected private information from their profiles and from those of their friends. Facebook allowed that sort of data collection at the time.The data on the 50 million users was harvested in 2014 by an outside researcher, Aleksandr Kogan. Mr. Kogan, a professor at Cambridge University, paid users small sums to take a personality quiz and download an app, which collected private information from their profiles and from those of their friends. Facebook allowed that sort of data collection at the time.
Then, as The New York Times reported over the weekend, Mr. Kogan gave the information to Cambridge Analytica, a firm founded by Stephen K. Bannon, the former White House political adviser, and Robert Mercer, the wealthy Republican donor. Passing the information to a third party violated Facebook’s policies, the company said last week. Then, as The Times reported over the weekend, Mr. Kogan gave the information to Cambridge Analytica, a firm founded by Stephen K. Bannon, the former White House political adviser, and Robert Mercer, the wealthy Republican donor. Passing the information to a third party violated Facebook’s policies, the company said last week.
“We are aware of the issues that have been raised but cannot comment on whether we are investigating,” a F.T.C. spokeswoman said in a statement on Tuesday. “We take any allegations of violations of our consent decrees very seriously.” “We are aware of the issues that have been raised but cannot comment on whether we are investigating,” an F.T.C. spokeswoman said in a statement on Tuesday. “We take any allegations of violations of our consent decrees very seriously.”
The investigation was reported by Bloomberg earlier on Tuesday.The investigation was reported by Bloomberg earlier on Tuesday.
Facebook said it expected to receive questions from the F.T.C. related to potential violations of its 2011 consent decree.Facebook said it expected to receive questions from the F.T.C. related to potential violations of its 2011 consent decree.
“We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the F.T.C. may have,” Facebook’s deputy chief privacy officer, Rob Sherman, said in a statement.“We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the F.T.C. may have,” Facebook’s deputy chief privacy officer, Rob Sherman, said in a statement.
The agency’s action against Facebook in 2011 was considered a landmark in privacy enforcement. The company could face fines of $40,000 a day per violation if the agency finds it violated their settlement.The agency’s action against Facebook in 2011 was considered a landmark in privacy enforcement. The company could face fines of $40,000 a day per violation if the agency finds it violated their settlement.
“There are all sorts obligations under consent decree that may not have been honored here,” said David Vladeck, a former director of consumer protection at the F.T.C. “This goes to the fundamental question of trust.”“There are all sorts obligations under consent decree that may not have been honored here,” said David Vladeck, a former director of consumer protection at the F.T.C. “This goes to the fundamental question of trust.”
Mr. Vladeck said the F.T.C.’s inquiry may just be the start. State attorneys general in Massachusetts and New York have announced plans or are considering investigations into whether Facebook violated consumer protection laws. Members of Congress are expected to be briefed soon by Facebook staff members, though so far, no committee leaders have scheduled hearings with the company. Mr. Vladeck said the F.T.C.’s inquiry may just be the start. On Tuesday, the New York attorney general, Eric T. Schneiderman, announced the state was joining the Massachusetts attorney general, Maura Healey, in an investigation into whether the company failed to protect the privacy of users in those states. The two state attorneys general sent letters to Facebook demanding it hand over information about the company’s interactions with Cambridge Analytica.
“Consumers have a right to know how their information is used — and companies like Facebook have a fundamental responsibility to protect their users’ personal information,” Mr. Schneiderman said. “Today’s demand letter is the first step in our joint investigation to get to the bottom of what happened.”
Members of Congress are expected to be briefed soon by Facebook staff members, though so far, no committee leaders have scheduled hearings with the company.
“With all the reports out there now, the conduct at issue here is squarely in the bull’s-eye of what the 2011 consent decree was all about,” said James C. Cooper, an associate professor at the Antonin Scalia Law School at George Mason University and a former F.T.C. official.“With all the reports out there now, the conduct at issue here is squarely in the bull’s-eye of what the 2011 consent decree was all about,” said James C. Cooper, an associate professor at the Antonin Scalia Law School at George Mason University and a former F.T.C. official.
The disclosures about the data, and the rising pressure on the company, have already hurt Facebook’s stock. The company’s shares were down more than 5 percent in midday trading on Tuesday, after falling sharply on Monday as well. Senators Amy Klobuchar, Democrat of Minnesota, and John Kennedy, Republican of Louisiana, have asked the chairman of the Judiciary Committee, Charles E. Grassley, Republican of Iowa, to hold a hearing on Facebook’s links to Cambridge Analytica. Republican leaders of the Senate Commerce Committee, organized by John Thune of South Dakota, wrote a letter on Monday to Mr. Zuckerberg demanding answers to questions about how the data was collected and if users were able to control the misuse of data by third parties.
Adding to concerns about the company is the impending departure of Alex Stamos, Facebook’s chief security officer, as reported by The Times.
Senators Amy Klobuchar, a Democrat from Minnesota, and John Kennedy, a Republican from Louisiana, have asked the chairman of the Judiciary Committee, Charles E. Grassley, a Republican from Iowa, to hold a hearing on Facebook’s links to Cambridge Analytica. Republican leaders of the Senate Commerce Committee, led by John Thune of South Dakota, wrote a letter on Monday to Mark Zuckerberg, Facebook’s chief executive, demanding answers to questions about how the data was collected and if users were able to control the misuse of data by third parties.
There have been growing calls for the top leadership at Facebook to appear before American and British lawmakers to testify about the social media giant’s sharing of data with Cambridge Analytica.There have been growing calls for the top leadership at Facebook to appear before American and British lawmakers to testify about the social media giant’s sharing of data with Cambridge Analytica.
“It’s time for Mr. Zuckerberg and the other C.E.O.s to testify before Congress. The American people deserve answers about social media manipulation in the 2016 election,” Senator Mark Warner, Democrat of Virginia, said on Tuesday.“It’s time for Mr. Zuckerberg and the other C.E.O.s to testify before Congress. The American people deserve answers about social media manipulation in the 2016 election,” Senator Mark Warner, Democrat of Virginia, said on Tuesday.
Facebook staff members are scheduled to brief his office and others in the Senate Intelligence, Commerce and other committees this week.Facebook staff members are scheduled to brief his office and others in the Senate Intelligence, Commerce and other committees this week.
“The possibility that Facebook has either not been transparent with consumers or has not been able to verify that third party app developers are transparent with consumers is troubling,” Mr. Thune said in his letter. “The possibility that Facebook has either not been transparent with consumers or has not been able to verify that third-party app developers are transparent with consumers is troubling,” Mr. Thune said in his letter.
On Tuesday morning, a committee within the British Parliament sent a letter to Mr. Zuckerberg asking him to appear before the panel to answer questions on the company’s connection to Cambridge Analytica.On Tuesday morning, a committee within the British Parliament sent a letter to Mr. Zuckerberg asking him to appear before the panel to answer questions on the company’s connection to Cambridge Analytica.
“The committee has repeatedly asked Facebook about how companies acquire and hold on to user data from their site, and in particular about whether data had been taken without their consent,” wrote Damian Collins, chairman of the British committee. “Your officials’ answers have consistently understated this risk, and have been misleading to the committee.”“The committee has repeatedly asked Facebook about how companies acquire and hold on to user data from their site, and in particular about whether data had been taken without their consent,” wrote Damian Collins, chairman of the British committee. “Your officials’ answers have consistently understated this risk, and have been misleading to the committee.”