Facebook feels the pressure over data leak

Politicians and regulators are demanding answers from the social media giant in the wake of revelations about the use of users’ personal information, writes Ben Brody

FACEBOOK is struggling to respond to growing demands to explain how the personal data of millions of its users could be exploited by a consulting firm that helped Donald Trump win the US presidency.

The uproar over Cambridge Analytica, which has put Facebook under scrutiny by the data regulators, has sparked demands for answers on both sides of the Atlantic.

In the US, lawmakers in both chambers of Congress want Facebook co-founder and chief executive officer Mark Zuckerberg to explain how his company has once again allowed its network to be abused for political ends.

Even before the latest revelations, there had been calls for social media CEOs to testify about their efforts to tackle ongoing meddling on their platforms by Russia, as well as attempts to inflame social debates in the US on issues like gun control. Now, it’s almost certain that some of these CEOs will be summoned for congressional hearings.

Facebook, which saw its stock value plummet by $60bn (€48.8bn) since the revelations emerged, sparking an

investor lawsuit, sent lower-level executives to brief several congressional panels.

But that’s unlikely to satisfy lawmakers who are calling for the inquiries to extend to other companies including Twitter and Google.

Among the questions that Facebook will likely be asked are when it became aware that Cambridge Analytica had obtained the data and why users were not notified.

“There are a lot of forces converging at this moment,” said Marc Rotenberg, president of the Electronic Privacy Information Center. “Obviously, Cambridge Analytica is a hot button for many people, and stories that are associated with that company have raised more and more questions.”

The furour started over revelations that Cambridge Analytica had siphoned data from some 50m Facebook users as it built a election-consulting company that boasted it could sway voters in contests all over the world.

While 270,000 users had authorised an academic to use their data for research purposes, according to reports, the researcher allegedly violated privacy rules when he handed the data off to Cambridge Analytica.

The firm, which on Tuesday suspended its chief executive, Alexander Nix, consulted for Trump’s campaign.

The scandal was fanned by Nix’s comments in an undercover video by Channel 4 News. Nix told the reporters, who posed as potential clients, that the firm’s services included the potential to try to induce targets with bribes, entrapment by prostitutes and spreading disinformation.

Cambridge Analytica has said the Facebook data at the centre of the uproar wasn’t used as part of services provided to the Trump campaign.

Among the questions that Facebook will likely be asked are when it became aware that Cambridge Analytica had obtained the data and why users were not notified.

On Tuesday, Brad Parscale, who ran the 2016 Trump campaign’s digital operations and hired Cambridge Analytica as a consultant, tweeted that unnamed people were taking credit for Trump’s victory.

“So incredibly false and ridiculous,” he wrote. “Let them say that under oath. Just an overblown sales pitch.” Parscale has since been named the manager of Trump’s 2020 re-election campaign.

Scrutiny of the issue is coming from the US Federal Trade Commission (FTC) and the attorney generals of New York, Massachusetts and Connecticut. The FTC is investigating whether Facebook violated terms of a 2011 consent decree with its handling of the data that was transferred to Cambridge Analytica, according to two people familiar with the matter.

The FTC, which has a consumer protection mandate, reached that agreement in response to a complaint by EPIC’s Rotenberg. If the trade commission finds Facebook violated terms of the consent decree, it has the power to fine the company more than $40,000 a day per violation, which could open the door to millions of dollars in fines. 

An FTC spokeswoman wouldn’t comment on whether the agency was investigating but said that it takes “any allegations of violations of our consent decrees very seriously”. The people who described the FTC’s moves asked not to be identified because the details aren’t public.

Facebook has said it rejects “any suggestion of violation of the consent decree”.

Without a national privacy law, it falls to attorneys general to enforce state data privacy statutes. New York State attorney general Eric Schneiderman announced on Tuesday that he and Massachusetts attorney general Maura Healey had sent a demand letter to Facebook as part of a joint probe stemming from the fallout.

Connecticut attorney general George Jepsen announced his own inquiry.

Facebook’s mounting troubles don’t end in the US. European regulators, concerned with how they can “allow the data on European consumers to flow to this company” could also take action, said Rotenberg.

The chairman of a UK parliamentary committee has announced he was requesting that Zuckerberg appear before the panel to supplement previous testimony by the company’s executives.

Stricter European privacy rules kick in on May 25 under the General Data Protection Regulation. European Union justice commissioner Vera Jourova said she plans to discuss the matter with Facebook during a visit in the US this week. Italian telecommunications regulator Agcom also asked Facebook to provide information on its data use.

Australia has also opened an investigation into the matter, according to that country’s Information and Privacy commissioner, Timothy Pilgrim.

Facebook said it would conduct staff-level briefings of six congressional committees this week including the US House and Senate Judiciary Committees, as well as the commerce and intelligence committees of both chambers.

A key question will be their appetite for a public appearance by the company’s leadership, especially Zuckerberg. The Facebook officials set to handle the briefings include the company’s deputy general counsel and deputy chief privacy officer, said a congressional official.

Senator Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee, said he wants to hear testimony from Zuckerberg, while Senator Richard Burr, a North Carolina Republican and the chairman of the Intelligence Committee, said any decision about calling Zuckerberg to appear before the panel is further off.

Senators Amy Klobuchar, a Minnesota Democrat, and John Kennedy, a Louisiana Republican, repeated their bipartisan call for testimony by the CEOs of Facebook, Twitter and Alphabet before the judiciary committee.

The growing issues surrounding big social media companies “aren’t going away”, Kennedy told Bloomberg TV.

“Mr Zuckerberg and the other CEOs need to come,” he added. “Some of Facebook’s behaviour has kind of gotten creepy.”

Republican Senator Susan Collins of Maine, who also serves on the Senate Intelligence Committee, said she has “grown increasingly concerned as we’re learning more and more about the manipulation of data, the harvesting of data from Facebook, the ads that were placed to sow the seeds of discord in this country.”

White House spokesman Raj Shah demurred when asked if Zuckerberg should testify, but he said Trump supports investigations by Congress or the FTC into the incident.


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