FTC to Probe Facebook for Use of Personal Data

Facebook Inc. is under investigation by a U.S. privacy watchdog over the use of personal data of 50 million users by a data analytics firm to help elect President Donald Trump.

The U.S. Federal Trade Commission is probing whether Facebook violated terms of a 2011 consent decree over its handing of user data that was transferred to Cambridge Analytica without their knowledge, according to a person familiar with the matter.

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. That complaint arose after the company changed some user settings without notifying its customers, according to an FTC statement at the time.

An FTC spokeswoman said in emailed statement that the agency is aware of the issues that have been raised, but can’t comment on whether it is investigating. The agency takes any allegations of violations of consent decrees seriously, the statement said.

If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company more than $40,000 a day per violation.

Facebook said in a statement it rejected “any suggestion of violation of the consent decree.”

“We respected the privacy settings that people had in place,” the statement said. “Privacy and data protections are fundamental to every decision we make.”

Facebook declined in New York trading, falling 3.2 percent to $167 as of 10:57 a.m. in New York. That follows a drop of 6.8 percent Monday that was the company’s largest since March 2014.

Despite concern about Cambridge Analytica’s use of the data expressed by several Democrats and Republicans, GOP-controlled congressional committees haven’t demanded hearings with Facebook executives. The Senate Commerce Committee did
announce
Monday evening it would like a briefing from the company on “the use and sharing of individual Facebook user data.”

Chuck Grassley, who serves as chairman of the Senate Judiciary Committee, also said he was
considering
a hearing with the CEOs of Facebook, Alphabet Inc.’s Google and Twitter Inc.

The Facebook revelations have also prompted transatlantic reaction. The chairman of a UK parliamentary committee announced Tuesday he was requesting that Facebook Chief Executive Officer Mark Zuckerberg, who has remained silent for days, appear before the panel to supplement prior testimony by the company’s executives.

White House spokesman Raj Shah said Tuesday that Trump “believes that Americans’ privacy should be protected” and supports federal investigations into the incident. “If Congress wants to look into the matter or other agencies want to look into the matter, we welcome that,” Shah said on Fox News.

Asked if Zuckerberg should testify, Shah demurred. “Without knowing the specifics, it’s difficult to talk about whether an individual should testify,” he said.

A Facebook spokesman confirmed that the company would be holding a townhall Tuesday, where a deputy general counsel would answer questions.

For more on Facebook, check out the Decrypted  podcast:

— With assistance by Terrence Dopp, and Jennifer Epstein