Regulators are bearing down on Facebook

Published 12:00 am Tuesday, March 27, 2018

A parade of regulators, politicians and law enforcement officials demanded to know more about Facebook’s privacy practices on Monday, as the fallout from the company’s relationship with a political data firm continued to spread.

Early in the day, the Federal Trade Commission confirmed reports that it was investigating how Facebook handles information about its users.

Soon after, Sen. Chuck Grassley, R-Iowa, chairman of the Senate Judiciary Committee, invited Mark Zuckerberg, Facebook’s chief executive, to testify about privacy standards in April. He also extended invitations to Google’s chief executive, Sundar Pichai, and Twitter’s chief executive, Jack Dorsey.

And a group of 37 attorneys general, including Oregon’s Ellen Rosenblum, sent Zuckerberg a letter asking for details about Facebook’s privacy safeguards.

But one group of people interested in Facebook — investors — had a muted reaction to the growing regulatory threat. Shares of Facebook fell sharply after the FTC confirmed its investigation but ended the day up 0.4 percent as overall trading on Wall Street recovered from a big drop this past week.

The federal investigation and threats followed recent news that the data collection firm Cambridge Analytica, which worked on the 2016 Trump presidential campaign, gained access to the personal data of more than 50 million Facebook users.

The FTC said it planned to determine whether the social media giant had violated a consent decree it signed in 2011 to protect users’ privacy.

The decree required Facebook to notify and receive explicit permission from users before sharing their personal information beyond the limits dictated by their privacy settings. Each violation of the agreement, which the agency reached with Facebook as part of a settlement over third-party apps, carries a penalty of up to $40,000 a day.

Cambridge Analytica is facing intense criticism, too. On Monday, Common Cause, a government watchdog group in Washington, filed complaints seeking federal investigations into allegations that the company violated federal election law.

The New York Times reported this month that employees of the data research firm with European or Canadian citizenship had worked extensively for its U.S. clients during the 2014 and 2016 elections, despite a warning from its own election lawyer.

The employees worked on polling, message development, and the designing of target audiences for digital ads and fundraising appeals.

The company said the work was permissible because none of the foreign employees had “strategic” or “operational” roles. But former employees contradicted that account, suggesting that the work violated laws in the United States that strictly limit what non-Americans can do for U.S. political campaigns.

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