US Regulator To Probe Facebook Over Data Concerns

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News of the latest investigation has wiped 5 percent off Facebook’s share price, as the Cambridge Analytica data row continues to grow

The US’ Federal Trade Commission (FTC) has said it plans to investigate Facebook over the use of data on 50 million users by Cambridge Analytica.

The news caused Facebook’s shares to fall by 5 percent. The scandal has already erased more than $55 billion (£39bn) of Facebook’s market value.

Separately, Germany’s cartel office said it is investigating the way Facebook uses data gathered from third-party websites visited by its users, as the country’s justice minister met with executives from the social network.

Executives from Apple and IBM, meanwhile, called for closer regulation of how firms use personal data in another sign of how prominent the incident has become.

facebook data centre
A Facebook data centre. Credit: Facebook

‘Serious’ concerns

Tom Pahl, acting director of the FTC’s Bureau of Consumer Protection, said the agency would look into whether Facebook had “failed” to protect users’ privacy.

He said the FTC regularly takes enforcement actions on data laws and that the commission took “very seriously” recent reports about the data being misused.

Facebook’s deputy chief privacy officer, Rob Sherman, told CNBC the company would “appreciate the opportunity to answer questions the FTC may have”.

The latest investigation follows a public outcry over allegations that Facebook allowed London-based Cambridge Analytica to improperly obtain information on 50 million of the social network’s users and employ the data to try to influence the 2016 US presidential election.

The UK’s data protection regulator is also looking into the
use of such data in the 2016 referendum on Britain’s exit from the EU
.

German probe

In Germany, privacy issues are particularly sensitive due to memories of the two surveillance states that existed there in the last century.

In an interview published on Monday in the newspaper Tagesspiegel, cartel office president Andreas Mundt said users were largely unaware of how much information Facebook obtains when they visit third-party sites that have Facebook integration.

The office is looking into possible abuses relating to “the collection and assessment of data from third-party sources outside Facebook”, he said.

In the interview, Mundt said the cartel office is concerned about the use of the Facebook “Like” buttons widely distributed online, which feed user tracking data to the company. He said it was concerning that users aren’t aware of this. A Belgian court recently ordered Facebook to cease using the buttons to collect data on individuals who weren’t members of the social network.

The cartel office is also examining whether Facebook is abusing what Mundt called its “market-controlling position”.

Facebook did not immediately provide comment.

German justice minister Katarina Barley met with Facebook executives on Monday to discuss privacy issues.

‘Dire’ situation

Speaking at the China Development Forum in Beijing, Apple chief executive Tim Cook said the Facebook data scandal indicated a “dire” situation that required regulation.

“I’m personally not a big fan of regulation because sometimes regulation can have unexpected consequences to it, however I think this certain situation is so dire, and has become so large, that probably some well-crafted regulation is necessary,” Cook said on Saturday, according to Reuters.

IBM chief executive Virginia Rometty said it was necessary for users to be aware of how their data was being used and to feel they were in control of it.

“If you’re going to use these technologies, you have to tell people you’re doing that, and they should never be surprised,” Rometty said on Monday. She said people should be allowed to “opt in and opt out, and be clear that ownership of the data does belong to the creator”.

Facebook took out full-page ads in Sunday newspapers in the US and the UK to apologise for the Cambridge Analytica incident.

On Friday, US lawmakers formally requested that Facebook founder Mark Zuckerberg appear at a congressional hearing to explain how the data arrived in the hands of the London firm.

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