California reveals Facebook probe, says social media company stonewalling investigation

[November 07, 2019]  By Diane Bartz and Paresh Dave

WASHINGTON/SAN FRANCISCO (Reuters) - California revealed for the first time an 18-month investigation into Facebook Inc's <FB.O> privacy practices and accused the social media giant on Wednesday of hampering the probe by failing to turn over emails from Chief Executive Mark Zuckerberg.

The revelation is the latest bad news for Facebook, which is already facing an investigation by 47 U.S. states over concerns the company engaged in anti-competitive practices, put consumer data at risk and pushed up advertising prices.

Will Castleberry, Facebook's vice president of state and local policy, said the company has "cooperated extensively with the state of California's investigation."

"To date we have provided thousands of pages of written responses and hundreds of thousands of documents," he said.

A spokeswoman for California Attorney General Xavier Becerra quickly shot back: "It appears we have different definitions of cooperation," noting there were 25 requests the company declined to answer or provide documents to fulfill.
 

The company's stock price barely budged after the announcement of the California probe.

The Facebook state investigations are part of a larger landscape of probes of big tech firms by the U.S. Justice Department and the Federal Trade Commission, as well as the House of Representatives Judiciary Committee.

The Massachusetts attorney general launched a similar privacy focused investigation into the company last year after the Cambridge Analytica revelations surfaced, while Washington, D.C.'s attorney general announced in December that he was suing Facebook over the scandal.

California's investigation began in 2018 as a probe into the Cambridge Analytica scandal but "expanded over time to an investigation into whether Facebook has violated California law, by among other things, deceiving users and ignoring its own policies in allowing third parties broad access to user data," the agency said in a court filing.

Facebook had inappropriately shared information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. The consultancy's clients included President Donald Trump's 2016 election campaign.

Becerra's investigators asked the court to require Facebook to turn over information about developers and other third parties' access to data and changes in privacy settings for Facebook.

Silhouettes of laptop users are seen next to a screen projection of Facebook logo in this picture illustration taken March 28, 2018. REUTERS/Dado Ruvic/Illustration

"If Facebook had complied with our legitimate investigative requests, we would not be making this announcement today. But we must move our investigation forward. We are left with little choice," Becerra told reporters.

Becerra's petition said the June 17 subpoena and interrogatories followed Facebook’s initial responses and later news reports "concerning other claims of wrongdoing by Facebook over users' privacy. Facebook’s responses to this second subpoena and set of interrogatories is patently deficient."

In particular, the attorney general's office pointed to a failure to look at communications of Facebook founder and CEO Zuckerberg.

"Facebook has not searched the email of the company's chief executive and chief operating officers for documents responsive to the subpoena," according to the filing to a California state court in San Francisco County.

The filing paints Facebook as a company that allowed app developers to access non-public information about its users, which they used to "build profiles on users, and sell those to third parties." This includes apps affiliated with Cambridge Analytica.

"Questions have arisen as to what Facebook knew about this conduct, why it failed to prevent app providers from misusing user data and whether this behavior violated California law," the attorney general's office said in the filing.

In July, Facebook agreed to pay a record-breaking $5 billion fine to resolve a Federal Trade Commission probe into its privacy practices and said it would will boost safeguards on user data.

(This story refiles to show in 5th paragraph that comment is from spokeswoman for the California attorney general, not from the attorney general)

(Reporting by Diane Bartz in Washington and Paresh Dave in San Francisco; Additonal reporting by David Shepardson in Washington and Katie Paul in San Francisco; Editing by Lisa Shumaker)

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