Facebook Faces New Calls for Washington Regulation After Report

(Bloomberg) -- Facebook Inc. came under renewed pressure from lawmakers following a New York Times report that the social media giant allowed more than 150 companies access to more users’ personal data than it had disclosed.

According to the report, the social network had allowed Microsoft Corp.’s Bing search engine to see names of virtually all Facebook users’ friends without consent, and gave Spotify and Netflix the ability to read Facebook users’ private messages.

Revelations about Facebook’s response to manipulation of the social network before and after the 2016 U.S. presidential election, and shifting accounts about breaches of users’ privacy, have battered the company’s reputation and fueled frustration on Capitol Hill. Lawmakers have been threatening for some time to impose new regulations to rein in Facebook, and the news report only seemed to further the case.

“It is beyond obvious at this point that social media platforms are simply not up to the task of voluntarily ensuring the privacy and security of their users,” Senator Mark Warner, a Democrat from Virginia, tweeted on Wednesday. “Congress must step in.”

Warner, the top Democrat on the Senate Intelligence Committee that heard testimony from Facebook Chief Operating Officer Sheryl Sandberg in September, has previously put forth several potential measures for regulating tech companies. He said the Times’s report “is yet another data point demonstrating that Facebook offers users far too little in the way of transparency about how their data is being used, and by whom.”

Senator Ron Wyden, an Oregon Democrat who has proposed legislation that would jail chief executives if they lie about privacy, slammed the company’s "chutzpah" on Wednesday and suggested recent revelations cast doubt on Facebook executives’ public statements.

“When companies repeatedly lie to Congress and the American people about what they do with our messages, location, likes and everything else, Congress has a duty to do something about it," Wyden said in a statement. "Clearly these people need some skin in the game before they will take Americans’ privacy seriously.”

Steve Satterfield, Facebook’s director of privacy and public policy, told the Times none of the partnerships violated users’ privacy, or a 2011 agreement with the U.S. Federal Trade Commission to require explicit permission from members before sharing their data.

In a statement published on its website on Wednesday, Facebook said its partnerships or features did not give companies access to information without people’s permission.

Menlo Park, California-based Facebook has been under fire since it learned earlier this year that personal information was transferred by an app developer to Cambridge Analytica, a political consulting firm that worked for Donald Trump’s 2016 presidential campaign. The company has spent the year trying to update its security and answer questions about the scandal from U.S. lawmakers and overseas policy makers. In addition to Sandberg’s testimony this fall, Chief Executive Officer Mark Zuckerberg testified at House and Senate hearings earlier this year.

Facebook shares fell less than 2 percent in New York 11:32 a.m. Wednesday to $140.68 even as other major tech stocks generally traded higher. Facebook has been battered in the markets this year as the data privacy scandal unfolded. The stock is down 20 percent for the year and is the worst performer among the FAANG companies.

To contact the reporters on this story: Nate Lanxon in London at nlanxon@bloomberg.net;Ben Brody in Washington at btenerellabr@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz, Robin Ajello

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