Facebook Privacy Lapses Are the Target of More Probes in the U.S.

(Bloomberg) -- Facebook Inc. has become the target of at least three more state probes into the alleged mishandling of user data, expanding the number of government agencies investigating privacy-violation claims against the company, according to people familiar with the matter.

The state probes are coalescing into two main groups scrutinizing the social-media company's data-protection practices, said the people, who declined to be named because the inquiries are confidential.

Pennsylvania Attorney General Josh Shapiro and Illinois counterpart, Kwame Raoul, have joined forces with Connecticut's William Tong, said two people. That group is focused on investigating existing allegations, one of the people said. New York, New Jersey and Massachusetts, which were already known to be probing Facebook, are seeking to uncover any potential unknown violations, said one of the people. North Carolina Attorney General Josh Stein is also investigating as part of a multi state effort, according to his office.

The inquires signal widening pressure on the company after a series of privacy scandals sparked by disclosures a year ago that the political consulting firm Cambridge Analytica, hired by President Donald Trump's 2016 campaign, gained access to data on tens of millions of the social network's users.

Such lapses are also fueling calls for U.S. legislation, even as investigations progress with the Federal Trade Commission and in the European Union. This week U.S. senators pressed the social-media giant over reports that the company secretly paid users for their data and allowed kids playing Facebook games to make purchases costing thousands of dollars, a practice that the company referred to in internal documents as “friendly fraud.”

“We're having productive conversations with attorneys general on this important topic,” Will Castleberry, a Facebook vice president of public policy, said in an email. “Many officials have approached us in a constructive manner, focused on solutions that ensure all companies are protecting people's information, and we look forward to continuing to work with them.”

States often team up to investigate companies over conduct that's national in scope, sometimes in tandem with the Justice Department. Such groups frequently reach settlements or file suit, as they did when a group sued Standard & Poor's in 2013 over faulty ratings on mortgage bonds. Major deals include a $25 billion agreement with banks in 2012 over foreclosure practices and a sweeping settlement with the tobacco industry in the 1990s.

The press offices for Shapiro and Raoul declined to comment. The press office for their New Jersey counterpart, Gurbir Grewal, confirmed the state is cooperating with New York and Massachusetts.

The District of Columbia's attorney general, Karl Racine, struck out on his own and sued Facebook in December. On Tuesday, Racine said at a conference in Washington that he expects more states will sue. He alleges Facebook violated Washington's consumer-protection laws by misleading users about the security of their data and failing to properly monitor apps' use of data.

To contact the reporters on this story: Erik Larson in New York at elarson4@bloomberg.net;David McLaughlin in Washington at dmclaughlin9@bloomberg.net;Sara Forden in Washington at sforden@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Stroth, Joe Schneider

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