Facebook confirms data sharing with Chinese companies

[June 06, 2018]  By David Shepardson

WASHINGTON (Reuters) - Facebook Inc <FB.O> said Tuesday it has data sharing partnerships with at least four Chinese companies including Huawei, the world's third largest smartphone maker, which has come under scrutiny from U.S. intelligence agencies on security concerns.

The social media company said Huawei <002502.SZ>, computer maker Lenovo Group <0992.HK>, and smartphone makers OPPO and TCL Corp <000100.SZ> were among about 60 companies worldwide that received access to some user data after they signed contracts to re-create Facebook-like experiences for their users.

Members of Congress raised concerns after The New York Times reported on the practice on Sunday, saying that data of users' friends could have been accessed without their explicit consent. Facebook denied that and said the data access was to allow its users to access account features on mobile devices.

More than half of the partnerships have already been wound down, Facebook said. It said on Tuesday it would end the Huawei agreement later this week. It is ending the other three partnerships with Chinese firms as well.

Chinese telecommunications companies have come under scrutiny from U.S. intelligence officials who argue they provide an opportunity for foreign espionage and threaten critical U.S. infrastructure, something the Chinese have consistently denied.

Senator Mark Warner, vice chairman of the Intelligence Committee, who asked Facebook if Huawei was among the companies that received user data, said in a statement that the House of Representatives Intelligence Committee had raised concerns about Huawei dating back in 2012.

"The news that Facebook provided privileged access to Facebook's API to Chinese device makers like Huawei and TCL raises legitimate concerns, and I look forward to learning more about how Facebook ensured that information about their users was not sent to Chinese servers," Warner said.

API, or application program interface, essentially specifies how software components should interact.

A Facebook executive said the company had carefully managed the access it gave to the Chinese companies.

"Facebook along with many other U.S. tech companies have worked with them and other Chinese manufacturers to integrate their services onto these phones," Francisco Varela, vice president of mobile partnerships for Facebook, said in a statement. "Facebook's integrations with Huawei, Lenovo, OPPO and TCL were controlled from the get-go — and we approved the Facebook experiences these companies built."

Varela added that "given the interest from Congress, we wanted to make clear that all the information from these integrations with Huawei was stored on the device, not on Huawei's servers."

Speaking in Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying said she would not comment on cooperation between companies and knew nothing of the situation.

"But we hope that the U.S. side can provide a fair, transparent, open and friendly environment for Chinese companies' investment and operational activities," Hua told reporters.

RESPONSE DEMANDED FROM ZUCKERBERG

Earlier on Tuesday, the Senate Commerce Committee demanded that Facebook's chief executive officer, Mark Zuckerberg, respond to a report that user data was shared with at least 60 device manufacturers, weeks after the social media company said it would change its practices after a political firm got access to data from millions of users.

Senators John Thune, the committee's Republican chairman, and Bill Nelson, the ranking Democrat, on Tuesday wrote to Zuckerberg after The New York Times reported that manufacturers were able to access data of users' friends even if the friends denied permission to share the information with third parties.

Facebook's founder and CEO Mark Zuckerberg speaks at the Viva Tech start-up and technology summit in Paris, France, May 24, 2018. REUTERS/Charles Platiau

In April, the Federal Communications Commission proposed new rules that would bar purchases by government programs from companies that it says pose a security threat to U.S. telecoms networks, a move aimed at Huawei and ZTE Corp <000063.SZ>, China’s No. 2 telecommunications equipment maker. The Pentagon in May ordered retail outlets on U.S. military bases to stop selling Huawei and ZTE phones, citing potential security risks.

ZTE was not among the firms that received access to Facebook data, but it has been the subject of U.S. national security concerns.

The letter asks if Facebook audited partnerships with the device manufacturers under a 2011 consent order with the Federal Trade Commission (FTC). It also asked if Zuckerberg wanted to revise his testimony before the Senate in April.

Facebook said it looks forward to addressing any questions the Commerce Committee has.

Facebook still has not answered hundreds of written questions submitted from members of Congress after Zuckerberg's testimony in April, according to congressional staff.

The data sharing mentioned in the Times story was used over the last decade by about 60 companies, including Amazon.com Inc <AMZN.O>, Apple Inc <AAPL.O>, Blackberry Ltd <BB.TO>, HTC Corp <2498.TW>, Microsoft Corp <MSFT.O> and Samsung Electronics Co Ltd <005930.KS>, Ime Archibong, Facebook vice president of product partnerships, wrote in a blog post on June 3.

The FTC confirmed in March that it was investigating Facebook's privacy practices.

Facebook allowed Apple and other device makers to have "deep" access to users' personal data without their consent, according to the Times.

The Times said Facebook allowed companies access to the data of users' friends without their explicit consent, even after it had declared it would no longer share the information with outsiders.

Archibong said the data was only shared with device makers in order to improve Facebook users' access to the information. "These partners signed agreements that prevented people’s Facebook information from being used for any other purpose than to recreate Facebook-like experiences."

Regulators and authorities in several countries have increased scrutiny of Facebook after it failed to protect the data of some 87 million users that was shared with now-defunct political data firm Cambridge Analytica.

Two Democrats on the Senate Commerce Committee, Edward Markey and Richard Blumenthal, on Monday also wrote to Zuckerberg.

Archibong said the cases were "very different" from the use of data by third-party developers in the Cambridge row.

New York Attorney General Barbara Underwood said on Monday the "data-sharing partnerships with other corporations" is part of the ongoing investigation into the reported misuse of Facebook user data by Cambridge Analytica.

(Reporting by David Shepardson; Additional reporting by Ben Blanchard in Beijing; Editing by Leslie Adler)

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