Federal Trade Commission probing Facebook disclosure

Officials are looking into whether Facebook’s research documents indicate it may have violated a 2019 agreement with the agency over privacy concerns, for which the company paid a record $5 billion, an official said. Paid the fine, said one of the people.

The FTC declined to comment.

Internal research found evidence that the company’s algorithms fuel discord and that its Instagram app is harmful to a large percentage of its users, especially teenage girls, among other findings. The documents provided the foundation for The Wall Street Journal’s Facebook Files series.

In a statement, Facebook said it is “always ready to answer questions from regulators and will continue to cooperate with government inquiries.”

The company has previously said that several research documents released by former Facebook product manager Frances Haugen have been misinterpreted and that the company has “invested heavily in the people and technology to keep our platform secure.”

The Facebook documents have triggered calls by lawmakers and children’s advocates for the FTC to investigate whether Facebook is engaging in deceptive or deceptive conduct.

Richard Blumenthal (D., Conn.), chairman of the Senate Consumer Protection Subcommittee, said one concern for the FTC is whether Facebook withdrew information from the agency related to its internal research.

“I think the FTC should be really angry if Facebook hid this content from them, as it did from us in Congress and in the public,” Mr Blumenthal said in an interview. He and Sen. Marsha Blackburn (R., Tenn.) asked Facebook in August about internal research into the effects of its products on children, “and they dodged our questions.”

Three other MPs- Sen. Ed Markey (D., Mass.) & Reps. Kathy Castor (d., Fla.) and Lori Trahan (d., Mass.) — sent a letter to the FTC on Oct. 8. He urged the commission to use its enforcement powers to ensure that all “powerful technology platforms comply with their public statements and policies on children and adolescents” [sic] Privacy.”

Separately, the Securities and Exchange Commission is communicating with Ms. Haugen’s attorneys, according to one of the attorneys representing her. The SEC has not commented.

According to one of the people familiar with the matter, the FTC is also in communication with Ms. Haugen’s team.

Unlike the SEC, the FTC has Ms. There is no formal program to protect whistleblowers like Haugen. The FTC is nonetheless a major government regulator of business conduct on the Internet in its role in regulating the market for unfair and deceptive trade practices.

An issue being explored by FTC staff is likely whether Facebook had a legal obligation to warn users about the risks revealed by internal research findings, said former FTC chairman William Kovacic, who is now George Washington University. I am Professor of Law. If Facebook fails to do so, it could constitute a deceptive business practice, he said.

David Vladeck, the former head of the FTC’s consumer-protection bureau, said the agency may also consider whether the company was acting fairly, given the findings of the company’s research. However, he said, proving any case may not be easy.

“You have to take into account Facebook’s denial that its research actually shows harm, and [its position] that the whistleblower has misrepresented or misrepresented the research,” he said.

The FTC launched a study of the social-media platform last December, asking Facebook and other Internet companies detailed questions about how they structure their services for children.

“The questions go further to uncover how children and families are targeted and classified,” several FTC commissioners wrote in a statement at the time.

A question may, for example, ask companies to “identify, validate the results, and/or use this use of all strategies, plans, presentations, analysis, machine learning or artificial intelligence, and/or use patterns involving children and adolescents.” Efforts to monetize need to be produced. This includes all efforts by children and adolescents to maintain and/or increase user engagement.”

Facebook’s 2019 settlement with the FTC came in response to concerns that information on millions of Facebook users had been improperly shared with Cambridge Analytica, a political data-analytics firm. The FTC required Facebook to tighten its privacy and data-security protections.

That agreement absolved Facebook and its top executives of any other consumer-protection violations known to the FTC at the time, which was widely criticized by Democrats on the FTC, who disagreed with the decision.

Some observers, including Mr. Vladeck, don’t think it will be a deterrent, as documents recently released to the FTC show Ms. Haugen’s disclosures would not be known.

The FTC is now led by Lina Khan, a critic of big tech companies, who is aiming to make the commission a more energetic industry watchdog.

“Under the new management, they recognize their role and the commitment they have made, and they intend to do a better job,” said Jeff Chester, executive director of the Center for Digital Democracy, a nonprofit that focuses on privacy. and advocates for consumer protection. Online.