The Federal Trade Commission confirmed a probe into how Facebook secures information shared by billions of users as CEO Mark Zuckerberg fights to regain customer confidence in the social media giant’s privacy protections.
The commission, which reached a settlement in 2011 with the Menlo Park, Calif.-based company on its handling of user data, “takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” Tom Pahl, acting director of the Bureau of Consumer Protection, said in a statement on Monday. The commission “has an open non-public investigation into these practices,” he said.
The FTC, which enforces privacy regulations in the U.S., is inquiring about information acquired by Donald Trump’s campaign consultant, Cambridge Analytica, on Facebook users and their connections, or “friends,” within the platform’s network, according to a person familiar with the matter.
The developments, which have prompted at least one congressional hearing, heighten challenges for a social media company already contending with concerns that phony news articles on its site were used to influence elections around the globe. That followed the FTC settlement seven years ago over claims that Facebook had repeatedly shared data that it told users would be confidential.
Companies that have settled previous FTC actions must comply with the agency’s orders imposing privacy and data-security requirements, Pahl said, and the agency will use all its available tools — including enforcement actions — to ensure that they do.
Separately, Senate Judiciary Committee Chairman Charles Grassley asked the Facebook founder on Monday to join Google CEO Sundar Pichai and Twitter CEO Jack Dorsey in testifying April 10 on the collection, sharing and retention of consumer data as well as strategies for better protecting it.
Facebook dropped as much as 6.5 percent on Monday before paring its losses. Its shares have fallen 16 percent to $155.89 since the company disclosed the Cambridge Analytica matter.
“We have a responsibility to protect your data, and if we can’t, then we don’t deserve to serve you,” Zuckerberg told users in a post on Facebook last week. “I’ve been working to understand exactly what happened and how to make sure this doesn’t happen again.”
Facebook, whose digital platform is used by more than 1 billion people a day, said Cambridge Analytica and its parent Strategic Communications Laboratories were suspended after Facebook learned that the companies may not have deleted data improperly shared by Dr. Aleksandr Kogan, a University of Cambridge psychology professor who obtained it through his app, “thisisyourdigitallife,” which used Facebook Login.
About 270,000 people downloaded the app, advertised as a research tool used by psychologists, giving their consent for Kogan to access information such as their location, content they had liked and limited data on friends whose privacy settings allowed access, Facebook said.
Although Kogan obtained the information legitimately, using the same techniques as other app developers on Facebook at the time, Facebook said he violated the company’s policies by sharing it with SCL, Cambridge Analytica and Christopher Wylie, a one-time Cambridge employee who exposed what had happened.
Admitting a “breach of trust” with users, the Facebook CEO promised new and better tools to control data afterward. Facebook will conduct thorough audits of any suspicious activity, he said, and restrict the data provided to apps upon sign-in to name, photo and e-mail address.
A tool listing all recently-used apps will be added to the top of the platform’s popular news feed, and users will be told how to revoke data access for them, he said. Additionally, developers will lose access to data from any apps not opened by a user in three months.
Despite Facebook’s efforts, which also include doubling the number of staffers assigned to user security, Credit Suisse analyst Stephen Ju said user growth and engagement with the platform may slow in the aftermath, hurting the company’s stock.
Cambridge Analytica, which was paid $5.9 million by the Trump campaign in the 2016 election and nearly that amount by the campaign of his Republican primary rival Ted Cruz, has said it complies with all Facebook’s rules and is working with the company to resolve its concerns as quickly as possible.
Cambridge CEO Alexander Nix was suspended by the company’s board in late March after he was recorded telling an undercover reporter for BBC Channel 4 that the firm had expertise in using tapes of sexual encounters and too-good-to-be-true offers to damage politicians.
