The U.S. Federal Trade Commission reportedly launched an investigation into Facebook to determine whether it broke the terms of a 2011 consent agreement when it shared nearly 50 million users' data to Cambridge Analytica, a data analytics firm that worked for President Donald Trump's 2016 campaign, sources familiar with the matter told BloombergPolitics.
Here are eight things to know about Facebook's data scandal.
1. On March 16, Facebook announced Cambridge Analytica had been suspended from the website for using improperly collected data from Facebook users, according to CNN Tech. Cambridge Analytica is a data firm that applies behavioral psychology to derive insights into consumer or voter behavior. President Trump's campaign paid Cambridge Analytica at least $6 million to assist in its digital operations.
2. In a 2011 settlement that resolved federal charges claiming Facebook deceived customers and forced them to share personal information, the social media giant said it would receive user consent for certain changes to its privacy settings.
3. Facebook claims a psychology professor initially properly collected the data in question, but the professor violated Facebook's rules when he or she passed it to Cambridge Analytica, according to CNN Tech. Cambridge Analytica claims it deleted all the data in 2015 after learning Facebook's rules had been broken.
4. Cambridge Analytica used an app, marketed as a "research app used by psychologists," to collect user data in 2014. The app sought permission from those who downloaded it but did not receive consent from those individuals' Facebook friends. The question centers around whether Facebook's privacy settings allowed Cambridge Analytica's app to collect the data at the time it was active, and if those permissions were too broad that they allowed for violations of the consent decree.
5. "We worked with Facebook over this period to ensure that they were satisfied that we had not knowingly breached any of Facebook's terms of service and also provided a signed statement to confirm that all Facebook data and their derivatives had been deleted," Cambridge Analytica said in a statement to The Seattle Times.
6. In an emailed statement, an FTC spokesperson told BloombergPolitics the agency is aware of the incident but can't comment on whether it is investigating the matter. If the FTC concludes Facebook violated terms of the consent decree, Facebook could face a fine of more than $40,000 a day per violation.
7. Although CEO Mark Zuckerberg has yet to address the situation, Facebook said in a statement to BloombergPolitics that it rejects "any suggestion of violation of the consent decree," adding that "We respected the privacy settings that people had in place … Privacy and data protections are fundamental to every decision we make." The company is also denying claims that Cambridge Analytica's actions constitute a data breach, since Facebook systems were not compromised.
8. After the story broke, the company's shares fell 6.8 percent March 19, marking its largest drop since March 2014.