Facebook's CEO Mark Zuckerberg leaves the European Parliament after answering questions, in Brussels

Facebook under criminal investigation over data-sharing agreements

Image credit: Yves Herman/Reuters

Federal prosecutors based in New York have opened a criminal investigation into data sharing deals struck between Facebook and other companies, including a handful of the world’s largest tech companies.

A grand jury in New York acting on behalf of the US attorney’s office for the Eastern District of New York has subpoenaed records from two major smartphone manufacturers, two anonymous sources familiar with the matter told the New York Times.

By entering into data-sharing partnerships with Facebook, the companies gained access to the personal information of hundreds of millions of Facebook users. These data-sharing agreements, which came to light throughout 2018, allow the companies to access data including contact information and users’ friends, often without the users’ knowledge or consent, effectively allowing these companies to override users’ privacy settings.

Facebook has entered data-sharing agreements with more than 150 other companies, including Alibaba, Microsoft, Amazon, Apple, Huawei, Netflix, Spotify, AT&T, HTC, LG, O2, Samsung, T-Mobile, Yahoo, Verizon, and Sony, although the majority of these agreements ended last year. Reports found that, through these agreements, Amazon was able to collect users’ names and contact information through their friends, Apple was able to hide all indications that its devices were requesting data, and Microsoft was able to map out connections between almost all Facebook users.

Facebook said that these agreements with device manufacturers allowed the Facebook app to work smoothly on mobile devices. The company defended the partnerships, stating that they were permitted under a provision in an agreement made with the Federal Trade Commission (FTC), which made some exemptions for service providers.

It is not yet known which aspect of these data-sharing agreements will be the focus of the New York grand jury.

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

Scrutiny into Facebook’s handling of user data attracted widespread condemnation in March 2018 when explosive reports in The Observer and the New York Times revealed that a data analytics company, Cambridge Analytica, had harvested personal information from 87 million unknowing Facebook users in order to build political advertising tools based on individuals’ psychological profiles. These tools were most notably used by the Trump campaign in the 2016 US presidential election.

Since the scandal erupted, Facebook has come under greater scrutiny from regulators such as the UK Information Commissioner’s Office, as well as from lawmakers all around the world, who are beginning to introduce regulation that could put an end to some of Facebook’s practices. The company is reportedly facing a “record setting” fine of potentially billions of dollars from the FTC over its continued failure to protect user data.

Speaking in a rare public appearance at Stanford University yesterday, WhatsApp co-founder Brian Acton – who sold the encrypted messaging app to Facebook for $19bn (£14bn) in 2014 – called on people to “delete Facebook”, as the only way to protect their data from the social media behemoth.

“The capitalistic profit motive, or answering to Wall Street, is what’s driving the expansion of invasion of data privacy and driving the expansion of a lot of negative outcomes that we’re just not happy with,” he commented. “I wish there were guardrails there. I wish there were ways to rein [these practices] in. I have yet to see that manifest and that scares me.”

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