Abuse of Facebook data draws FTC investigation

The Federal Trade Commission confirmed on Monday that it was investigating Facebook after revelations that a consulting firm affiliated with Donald Trump’s presidential campaign got data on millions of Facebook users, a probe that carries the potential for steep fines and other penalties on the social giant.

That included information on friends of people who had downloaded a psychological quiz app, even though those friends hadn’t given explicit consent to sharing.

“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” Tom Pahl, the acting director of the agency’s Bureau of Consumer Protection, said in a statement Monday. “Accordingly, the FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices.”

Pahl said the U.S. probe would include whether the company engaged in “unfair acts” that cause “substantial injury” to consumers. Facebook reached a settlement with the FTC in 2011 offering privacy assurances, though the FTC’s probe may extend to Facebook’s compliance with U.S.-European Union principles for transferring data.

Facebook said in a statement Monday that the company remains “strongly committed” to protecting people’s information and that it welcomes the opportunity to answer the FTC’s questions.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, believes Facebook was in violation of the 2011 settlement in letting Cambridge Analytica harvest data on friends of Facebook users. He called the investigation “good news.”

“This is what Facebook was doing 10 years ago that people objected to, what the FTC should have stopped in 2011,” Rotenberg said. “It makes zero sense that when a person downloads their apps, they have the ability to transfer the data of their friends.”

Although CEO Mark Zuckerberg talked about changes in 2014 that would have prevented

this, Rotenberg said it should have been banned already under the 2011 consent decree. He said the FTC had dropped the ball in failing to enforce that.

Facebook is also facing questions about reports that it collected years of contact names, telephone numbers, call lengths and information about text messages from Android users. Facebook says the data is used “to improve people’s experience across Facebook” by helping to connect with others.

Facebook said Sunday that the information is uploaded to secure servers and comes only from Android users who opt in to allow it. Spokesmen say the data is not sold or shared with users’ friends or outside apps.

The company also said in a website posting that it does not collect the content of text messages or calls. A spokesman told The Associated Press that Facebook uses the information to rank contacts in Messenger so they are easier to find, and to suggest people to call.

Users get the option to allow data collection when they sign up for Messenger or Facebook Lite, the Facebook posting said. The data collection can be turned off in a user’s settings, and all previously collected call and text history shared on the app will be deleted, Facebook

said.

SENATE HEARING SET

Also on Monday, a panel of Senate lawmakers set a hearing with top executives of Facebook, Google and Twitter next month.

The Senate Judiciary Committee’s chairman, Sen. Chuck Grassley, R-Iowa, on Monday scheduled an April 10 hearing on the “future of data privacy and social media” — and the panel said it would explore potential new “rules of the road” for those companies.

It’s the third such request that lawmakers have made of Zuckerberg to testify since it emerged earlier this month that Cambridge Analytica, a data firm hired by Trump during the 2016 campaign, may have improperly accessed names, “likes” and other personal information from at least 30 million, and as many as 50 million, Facebook users.

The Senate Judiciary Committee’s hearing spells the first time that congressional lawmakers have expanded their scrutiny to include Zuckerberg’s peers: Google CEO Sundar Pichai and Twitter CEO Jack Dorsey. The result could be a hearing that exposes both of those tech giants —whose data is not known to have been taken by Cambridge Analytica — to questions about the extent to

which they profit from their users’ most personal data, too.

A spokesman for Zuckerberg, who last week expressed his openness to appear at a hearing, said Facebook is still reviewing the request. A spokesman for Twitter declined comment. Spokesmen for Google did not immediately respond to requests for comment.

For its part, Cambridge Analytica said in a statement Friday that it had obtained data from the social network “in line with Facebook’s terms of service and data protection laws.”

The Senate Judiciary Committee, however, could prove to be the toughest political territory for Facebook and its Silicon Valley peers. Lawmakers there have been seething over Facebook, Google and Twitter since last fall, when the panel grilled those tech giants’ lawyers about another issue: Russian propaganda that spread on their platforms around the 2016 election.

Questions about Trump, the Russian government’s disinformation efforts and the presidential race are likely to return at the scheduled April 10 session — on top of new queries about the ways that the biggest brands in the tech industry collect and protect information about their users. Some of the Judiciary

Committee’s members, including Sens. John Kennedy, R-La., and Richard Blumenthal, D-Conn., are regular critics of the tech industry’s privacy practices.

For now, the session is set to “broadly cover privacy standards for the collection, retention and dissemination of consumer data for commercial use,” the committee announced Monday. “It will also examine how such data may be misused or improperly transferred and what steps companies like Facebook can take to better protect personal information of users and ensure more transparency in the process.”

STATES QUERYING FACEBOOK

Separately, the attorneys general for 37 U.S. states and territories sought details Monday on how Facebook monitored what app developers did with data collected on Facebook users and whether Facebook had safeguards to prevent misuse.

“Facebook has made promises about users’ privacy in the past, and we need to know that users can trust Facebook,” they wrote. “With the information we have now, our trust has been broken.”

In a statement, Facebook’s vice president for state and local public policy, Will Castleberry, said the attorneys general “have raised important questions and we appreciate their interest. Our internal review of the situation continues and we look forward to responding.”

Facebook’s stock, which already took a big hit last week, fell Monday after the FTC announcement but recovered by the end of the day. With Monday’s close at $160.06, the stock is down almost 14 percent since March 16, when the Cambridge Analytica scandal broke.

European officials also have also been investigating or seeking more information. Germany’s justice minister said Monday that she wants closer oversight of companies such as Facebook after a meeting with its executives about the abuse of users’ data. Last week, a U.K. parliamentary media committee summoned Zuckerberg to testify about how Facebook uses data, while U.K. Information Commissioner Elizabeth Denham is investigating how Cambridge Analytica got the data.

In addition, the state’s attorney of Cook County in Illinois has sued Facebook and Cambridge Analytica for consumer fraud. Facebook has not commented on the lawsuit.