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Facebook Draws Scrutiny From FTC, Congressional Committees

Facebook Inc. is drawing scrutiny from the main U.S. privacy watchdog and half a dozen congressional committees over how the personal data of 50 million users was obtained by a data analytics firm that helped elect President Donald Trump.

Facebook said it would conduct staff-level briefings of six committees Tuesday and Wednesday. That includes meetings with the House and Senate Judiciary Committees, as well as the commerce and intelligence committees of both chambers.

The U.S. Federal Trade Commission is also probing whether Facebook violated terms of a 2011 consent decree over its handling of personal user data that was transferred to Cambridge Analytica without users’ knowledge, according to a person familiar with the matter. The FTC will be sending a letter to the company, another person said. Facebook slumped on the news, extending Monday’s decline.

The FTC is the lead U.S. agency for enforcing companies’ adherence to their own privacy policies and could fine the company into the millions of dollars if it finds Facebook violated a 2011 consent decree. 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 probe Monday.

Amid the scrutiny, Facebook will be confronting immediate demands by Congress. In addition to the briefings, Senator Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee, said he wants to hear testimony from Facebook Chief Executive Officer Mark Zuckerberg, as well as Twitter Inc. CEO Jack Dorsey. Senator Richard Burr of North Carolina, chairman of the Intelligence Committee, said any decision about calling Zuckerberg to appear before the panel is farther off.

Republican Senator Susan Collins of Maine, who also serves on the Senate Intelligence Committee, said Tuesday that 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.” The panel has previously heard testimony into Russia’s use of Facebook to attempt to meddle in the 2016 election.

“I believe that Facebook, Twitter, the other social media platforms have a lot of questions to answer,” she said.

Cambridge Denial

Cambridge Analytica’s board announced Tuesday it was suspending CEO Alexander Nix pending an independent investigation into his comments in an undercover video by London’s 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.

In an earlier statement, Cambridge Analytica said it “strongly” denied “false allegations” in the media and said that the Facebook data at the center of the scandal wasn’t used as part of services provided to the Trump campaign.

Under the terms of the 2011 settlement with the FTC, Facebook agreed to get user consent for certain changes to privacy settings as part of its resolution 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.

‘Stronger Protections’

“The FTC takes the allegations that the data of millions of people were used without proper authorization very seriously,” FTC Commissioner Terrell McSweeny, a Democrat, said in a statement Tuesday. “The allegations also highlight the limited rights Americans have to their data. Consumers need stronger protections for the digital age such as comprehensive data security and privacy laws, transparency and accountability for data brokers, and rights to and control over their data.”

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