Facebook-Cambridge Analytica Data Sharing Probe Said to Now Include FBI, SEC, FTC
A federal investigation into Facebook’s sharing of data with political consultancy Cambridge Analytica has broadened to focus on the actions and statements of the tech giant and now involves three agencies, including the Securities and Exchange Commission, according to people familiar with the official inquiries.
Representatives for the FBI, the SEC and the Federal Trade Commission have joined the Department of Justice in its inquiries about the two companies and the sharing of personal information of 71 million Americans, suggesting the wide-ranging nature of the investigation, said five people, who spoke on the condition of anonymity to discuss a probe that remains incomplete.
Facebook discovered in 2015 that Cambridge Analytica, which wasn’t yet working for the Trump campaign and other Republican candidates, had obtained Facebook data to create voter profiles. Yet Facebook didn’t disclose that information to the public until March, on the eve of the publication of news reports about the matter.
The questioning from federal investigators centres on what Facebook knew three years ago and why the company didn’t reveal it at the time to its users or investors, as well as any discrepancies in more recent accounts, among other issues, according to these people. The Capitol Hill testimony of Facebook officials, including Chief Executive Mark Zuckerberg, also is being scrutinised as part of the probe, said people familiar with the federal inquiries.
Facebook confirmed that it had received questions from the federal agencies and said it was sharing information and cooperating in other ways. “We are cooperating with officials in the US, UK and beyond,” said Facebook spokesman Matt Steinfeld. “We’ve provided public testimony, answered questions, and pledged to continue our assistance as their work continues.”
The Department of Justice and the other federal agencies declined to comment. The FTC in March disclosed that it was investigating Facebook over possible privacy violations.
The SEC has described the investigation as “The Facebook Matter,” according to two people who have seen related documents.
Cambridge Analytica has closed operations since the scandal erupted and an inquiry to its press office was returned as undeliverable.
The New York Times previously reported that the Department of Justice was investigating Cambridge Analytica. But the extent of federal investigation into the actions and statements of Facebook itself has not previously been revealed.
“The fact that the Justice Department, the FBI, the SEC and the FTC are sitting down together does raise serious concerns,” said David Vladeck, former director of the FTC’s Bureau of Consumer Protection and now a Georgetown Law professor. He said he had no direct knowledge of the investigation but said the combination of agencies involved “does raise all sorts of red flags.”
The expanding federal probe creates new risk to Facebook as it struggles to emerge from nearly two years of scandal, beginning with the role its platform played in disseminating Russian disinformation efforts during the 2016 presidential campaign.
Facebook’s controversies were beginning to cool this year before the news broke about Cambridge Analytica. In 2015, Cambridge University researcher Aleksandr Kogan, working with Cambridge Analytica, used a quiz app to gather data on those who took the survey and their friends. The Facebook data-gathering feature, called an API, was a common technique at the time for assembling massive data troves for analysis, including names, hometowns, work histories, religious affiliations and personal preferences.
Facebook has portrayed that data gathering as an improper use because it wasn’t used for academic purposes. But Cambridge Analytica and Kogan have said they did nothing wrong and that many others used the same feature. Kogan has maintained that he got permission to share the data when he changed the terms of service of the app, from a strictly academic contract to a contract allowing broader commercial use. He also said he notified Facebook of the change to his terms of service.
At the time, when made aware of the data Cambridge Analytica had obtained, Facebook investigated the analytics firm and Kogan. Facebook said it ordered them to delete the data and promise not to do it again.
Facebook has not said whether that data was used by Cambridge Analytica’s client, the Trump campaign. Cambridge Analytica said it deleted the data at Facebook’s request.
Facebook stopped allowing app developers to gain information about a person’s Facebook friends in 2014 and 2015. It continued to share some data with a select groups of app developers and with device and software makers, including Apple, Amazon, Samsung, and Huawei, before announcing it would curtail that amid a new wave of news reports this month.
Since the Cambridge Analytica scandal broke in March, Facebook has audited thousands of apps that had access to data during the looser period prior to 2015. The company has suspended 200 apps, and has further restricted access to data for all developers using Facebook and its sister service, Instagram.
In March, the company’s stock dropped more than 13% in the week after the revelations. Financial regulators pay close attention to sudden moves in a company’s stock price.
Many details about the federal probe remain unknown, including whether investigators are considering criminal charges or civil penalties for the companies involved.
But investigators seem particularly focused on what data Facebook allowed to be collected from its platform and under what conditions, as well as what Facebook told the public at the time of the data sharing and during recent Congressional hearings, said these people. These discrepancies came up during Zuckerberg’s Capitol Hill hearings in April. Sen. Richard Blumenthal, D-Conn.,held up an exhibit with Kogan’s broader terms of service and asked Zuckerberg if he had seen them before. Zuckerberg said no.
The probe by the FTC, which oversees consumer privacy, concerns whether Facebook violated a 2011 consent decree regarding its privacy practices. An FTC fine could potentially reach into the billions of dollars.