WASHINGTON/ LONDON: The US Federal Trade Commission is investigating Facebook Inc over its use of personal data, Bloomberg News reported on Tuesday, after a whistleblower said a political consultancy hired by Donald Trump improperly accessed information on 50 million Facebook users to sway public opinion. Facebook shares lost 5.3% to a six-month low, extending Monday’s 7% fall, and wiping another $25 billion from its market capitalisation as investors fretted the world’s largest social media network could face massive fines and that its dented reputation could scare off users and advertisers. Shares of Snap Inc and Twitter Inc also fell.
US and European lawmakers have demanded an explanation of how the consultancy, Cambridge Analytica, gained access to the data in 2014 and why Facebook failed to inform its users. Facebook will brief US Senate and House aides on Wednesday, congressional staff said. The FTC, the regulatory agency in charge of consumer protection, is looking into whether Facebook violated terms of a 2011 consent decree of its handling of user data that was transferred to Cambridge Analytica without their knowledge, a person familiar with the matter told Bloomberg.
“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 as we did in 2012 in a privacy case involving Google,” an FTC spokesman said. Under the 2011 settlement, Facebook agreed to get user consent for certain changes to privacy settings as part of a settlement of federal charges that it deceived consumers and forced them to share more personal information than they intended, Bloomberg reported.
If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company thousands of dollars a day per violation. “We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have,” Facebook deputy chief privacy officer Rob Sherman said.
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The White House said it welcomed inquiries into reports that Trump’s consultants misused Facebook data. “The President believes that Americans’ privacy should be protected ... if Congress wants to look into the matter or other agencies want to look into the matter, we welcome that,” White House deputy press secretary Raj Shah told Fox News Channel.
In Britain, the Information Commissioner’s Officewas seeking a warrant on Tuesday from a judge to search the offices of London-based Cambridge Analytica. Created in 2013, Cambridge Analytica markets itself as a source of consumer research, targeted advertising and other data-related services to both political and corporate clients.
According to New York Times, it was launched with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by the-then future Trump White House adviser Steve Bannon.
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