The US securities regulator is reportedly looking into Facebook’s disclosures to investors about the harvesting of user data by political research firm Cambridge Analytica, as the company faces the threat of a privacy class action in Australia over the data debacle.
The Wall Street Journal reported Thursday that the US Securities and Exchange Commission is looking into whether Facebook adequately warned investors that user data may have been accessed by developers and other third parties, in the wake of revelations that Cambridge Analytica collected information on 87 million Facebook users worldwide.
According to The Journal, the SEC is seeking information from the social media giant to ascertain how much it knew about Cambridge Analytica’s use of the data — which was used in the campaign to elect President Donald Trump and to influence the Brexit vote in the UK — and how it assessed the risk it would face if developers accessed user data, in violation of Facebook’s policies.
Facebook is taking heat around the world for compromising user data. The UK Information Commissioner’s Office this week slapped Facebook with a £500,000 fine — the maximum penalty allowed — for two breaches of the Data Protection Act.
“Facebook has failed to provide the kind of protections they are required to under the Data Protection Act,” Elizabeth Denham, the information commissioner, said.
In Australia, IMF Bentham said it is considering funding a privacy class action against Facebook for allowing political research firm Cambridge Analytica to harvest information from the Facebook accounts of over 311,000 Australians.
The litigation funder said Tuesday that it is financing a representative complaint, which will be filed by Johnson Winter & Slattery with the Office of the Information Commissioner on behalf of Australians whose personal data was provided to Cambridge Analytica through their or a friend’s use of the Facebook app “This is My Digital Life”.
IMF said the complaint, which will be brought against Facebook Australia Pty Ltd, Facebook Inc. and Facebook Ireland Ltd. and allege violations of the Australian Privacy Principles, may not yield recoveries for members of the group.
“In light of this, IMF will determine at a later stage if it will fund any class action against the Respondents arising from the alleged breaches of the Australian Privacy Principles,” IMF said.
In April, the Privacy Commissioner opened an investigation into Facebook on the heels of confirmation by the social media giant that the data of over 311,000 Australian users may have been improperly harvested by Cambridge Analytica.
Investigators will confer with regulators worldwide and examine whether Facebook breached Australia’s Privacy Act, Acting Commissioner Angelene Falk said.
The company said in a statement at the time that it would cooperate with the privacy commissioner’s investigation.
The Australian Competition and Consumer Commission chair Rod Sims said in late March that the regulator would look at whether Facebook was misleading users about how it collects and uses their data.
“We’re interested from a competition point of view about how data is used and the extent to which that impedes competitors, but I think the consumer point is now the more relevant one in terms of what has been revealed over the past week,” he said.
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