Facebook Under New Criminal Investigation For Data Sharing With Tech Companies

In the wake of Facebook’s platform-wide outage on Wednesday that affected all of its 2.3 billion monthly users, there was more bad news on the horizon for the social media giant. The New York Times is reporting that federal prosecutors are conducting a criminal investigation of the company’s business practices, focusing particularly on data-sharing deals it forged with several tech companies. The companies that are being most closely scrutinized were identified by two anonymous sources as “at least two prominent makers of smartphones and other devices” that have formed partnerships with Facebook to gain access to the personal data of hundreds of millions of Facebook users.

Over 150 companies allegedly have deals along these lines with Facebook, including Amazon, Apple, Sony, and Microsoft, having formed partnerships which allow those companies to see who a Facebook user’s friends are, their contact information, and other personal data, often without the explicit consent of the user.

“We are cooperating with investigators and take those probes seriously. We’ve provided public testimony, answered questions and pledged that we will continue to do so,” read a statement by a Facebook spokesperson.

The company has faced scrutiny over these kinds of partnerships before, especially in the wake of the Cambridge Analytica scandal in which the political consulting firm was alleged to have improperly obtained the data of some 87 million Facebook users and implemented it in a scheme to help Donald Trump get elected. However, it isn’t clear exactly when the current grand jury inquiry, led by prosecutors in the Eastern District of New York began, nor what it is focused on exactly. It is known, though, that the inquiry is separate from the Cambridge Analytica investigation, as that one is being run by the Justice Department’s securities and fraud unit and prosecutors from the Northern District of California.

Mark Zuckerberg on stage.

One former Cambridge employee went on the record anonymously for the report and claimed that he had been interviewed by prosecutors as recently as late February. He added that one important line of questioning for the investigators appeared to be whether Facebook had been misled by Cambridge, or if the company was complicit in the improper use of its data.

While Facebook executives have previously claimed that they were told Cambridge’s data-gathering tools were only going to be used for academic purposes, the investigation turned up fine print in the user agreement with one of the company’s quizzes that permitted the data to be used for commercial purposes, which is something Facebook reportedly should and would have known about.

Federal Trade Commission officials are now considering whether Facebook violated a 2011 agreement covering the sharing of user data. If so, the company could be facing a multi-billion dollar fine over the matter if it doesn’t go their way.