- The Federal Trade Commission is investigating Facebook (NASDAQ:FB)'s handling of personal data, Bloomberg reported Tuesday morning.
- The investigation will examine whether Facebook violated a 2011 agreement with the FTC that focused on how Facebook handles user data and notifies users to changes in its policies.
- The FTC is also investigating any access granted by Facebook to the data analytics firm Cambridge Analytica, which has ties to Donald Trump's 2016 presidential campaign.
- This is the latest development in a scandal that has ballooned since The New York Times and The Guardian reported over the weekend that Cambridge Analytica had in its possession user data from 50 million Facebook accounts.
The Federal Trade Commission is investigating Facebook's use of people's personal data, Bloomberg reported on Tuesday.
Citing an unnamed source, Bloomberg reported that the FTC would examine whether the social media company violated a 2011 consumer consent agreement with the FTC over how it would handle and notify users of changes to its user-data policy.
Facebook made the agreement with the FTC in 2011 as part of a settlement following complaints that the social media company had failed to protect users' privacy or properly notify them of how their information would be used or shared.
The FTC will also investigate whether Facebook allowed the data analytics firm Cambridge Analytica access to some Facebook users' data in violation of its policies, according to the report.
The FTC's reported investigation into Facebook is the latest development in a scandal involving Cambridge Analytica, which The New York Times and The Guardian in explosive reports over the weekend revealed had access to the information of 50 million Facebook users.
The data consulting company has been described as instrumental in helping Donald Trump's 2016 presidential campaign and its social media strategy.
The revelations have since led authorities from Britain, the EU, and the US to launch investigations into Facebook and Cambridge Analytica.
The FTC said it couldn't confirm an investigation into Facebook was underway, but provided Business Insider with the following 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 as we did in 2012 in a privacy case involving Google (NASDAQ:GOOGL).”
The scandal
According to a former Cambridge Analytica employee named Christopher Wylie, the firm gained access to the information of 50 million Facebook accounts through a third-party research app that offered a personality quiz in return for allowing access to information on their Facebook profile and those of their Facebook friends.
While some 270,000 people are said to have used the personality-quiz app, Wylie said it was able to harvest data on 50 million Facebook accounts through the friend network of those participants.
Facebook has said it was notified that the Facebook data was in the hands of Cambridge Analytica years ago, and the social media company followed up with Cambridge Analytica and demanded the data was deleted. Facebook says Cambridge Analytica said it had deleted the information, but Wylie told the Times and the Guardian that the company held onto the data even after assuring Facebook it had been disposed of.
The CEO of the company, Alexander Nix, was recently caught on camera bragging that the analytics firm could entrap politicians with bribes and sex workers.
Facebook, which has maintained that the data was not obtained through a security breach but rather a mishandling of the user info from a third-party research app that worked with Cambridge Analytica, saw its stock plummet as much as 8% on Monday. On Monday night, The New York Times reported that Alex Stamos, Facebook's chief information security officer, is planning to leave the company in August as it grapples with a storm of controversies relating to Facebook's role in spreading misinformation during the election.
Facebook stock was down Tuesday morning following Bloomberg's report of the FTC investigation.