Things Get Serious: FBI, FTC and SEC Join the Justice Department to Investigate Facebook’s Cambridge Analytica Disclosures

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Jul 2
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It appears Facebook may be in for some trouble as the Federal Bureau of Investigation (FBI), the Federal Trade Commission (FTC), and the Securities and Exchange Commission (SEC) are now all joining the Department of Justice to find out how Facebook was used by Cambridge Analytica to access and misuse data of over 71 million Americans.

The inclusion of a number of these agencies suggests the wide-ranging nature of the investigation, the Washington Post reported citing five people, who spoke on the condition of anonymity. The Post suggests that the focus of this investigation is on how truthful Facebook has been about its disclosures.

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As a reminder, Facebook never disclosed that it had discovered Cambridge Analytica siphoning off data of millions of its users in 2015 until the media discovered and reported the incident earlier this year.

Focus remains on Facebook for mishandling the data of millions of its users and then choosing not to disclose that information

“The questioning from federal investigators centers on what Facebook knew three years ago and why the company didn’t reveal it at the time to its users or investors, as well as any discrepancies in more recent accounts, among other issues, according to these people,” the Post reports.

“The Capitol Hill testimony of Facebook officials, including Chief Executive Mark Zuckerberg, also is being scrutinized as part of the probe.”

The problem for the Silicon Valley company would be when this investigation discovers that Facebook either lied during the testimonies and disclosures or that it’s found violating the 2011 consent decree made with the FTC. Zuckerberg’s evasive congressional testimony won’t help the case, either.

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“The SEC has described the investigation as ‘The Facebook Matter,’ according to two people who have seen related documents,” the report suggested. The focus doesn’t appear to be on Cambridge Analytica, a political consultancy firm that has filed for bankruptcy following this scandal with reports of the same team having created a new firm. The focus of this broadened federal probe is on Facebook that first enabled this access and then chose not to inform the public or the government about it.

“We are cooperating with officials in the US, UK and beyond,” a Facebook spokesperson said in a statement. “We’ve provided public testimony, answered questions, and pledged to continue our assistance as their work continues.”

The news of this expanding federal probe creates more problems and worries for Facebook that has continued to fall into a rabbit hole of privacy and security controversies since March (a fresh one arrived this evening). “The fact that the Justice Department, the FBI, the SEC and the FTC are sitting down together does raise serious concerns,” former FTC Bureau of Consumer Protection chief David Vladeck told the Post, adding that the combination of agencies involved “does raise all sorts of red flags.”

Ashkan Soltani, former FTC chief technologist told the New York Times that the involvement of so many federal agencies is “very significant because it means the government is not just interested in harms to privacy, but is interested in a broad array of harms.”

Facebook stock fell roughly 1.5 percent after-hours on Monday after the Post report went live.

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