FTC Grants Final Approval to Settlement with Former Cambridge Analytica CEO, App Developer over Allegations they Deceived Consumers over Collection of Facebook Data

FTC Grants Final Approval to Settlement with Former Cambridge Analytica CEO, App Developer over Allegations they Deceived Consumers over Collection of Facebook Data

The Federal Trade Commission has granted final approval to a settlement with the former CEO of Cambridge Analytica, LLC and an app developer who worked with the company to resolve allegations they used deceptive tactics to collect personal information from tens of millions of Facebook users for voter profiling and targeting.

In its complaint, the FTC alleged that app developer Aleksandr Kogan worked with Cambridge Analytica and its former CEO Alexander Nix to enable Kogan’s GSRApp to collect Facebook data from app users and their Facebook friends. The FTC alleged that app users were falsely told the app would not collect users’ names or other identifiable information. The GSRApp, however, collected users’ Facebook User ID, which connects individuals to their Facebook profiles.

The Commission recently announced an Opinion that found that Cambridge Analytica, which filed for bankruptcy in 2018, engaged in similar conduct in violation of the FTC Act.

As part of the settlement, Kogan and Nix are prohibited from making false or deceptive statements regarding the extent to which they collect, use, share, or sell personal information, as well as the purposes for which they collect, use, share, or sell such information. In addition, they are required to delete or destroy any personal information collected from consumers via the GSRApp and any related work product that originated from the data.

The Commission received one comment on the proposed settlement. The Commission voted 5-0 to finalize the order and to send a response to the commenter.

Rafael Moscatel is Managing Director of Compliance and Privacy Partners, a consulting firm specializing in data governance and privacy solutions. He is an award-winning Information Governance Professional (IGP), Certified Records Manager (CRM), Certified Information Privacy Manager (CIPM). Rafael has spent the last twenty years developing large-scale Information Management Programs for the Fortune 500 including Paramount Pictures and Farmers InsuranceReach him at 323-413-7432, follow him on Twitter at @rafael_moscatel or visit http://www.capp-llc.com to learn more.

FTC Issues Opinion and Order Against Cambridge Analytica For Deceiving Consumers About the Collection of Facebook Data, Compliance with EU-U.S. Privacy Shield

The Federal Trade Commission issued an Opinion finding that the data analytics and consulting company Cambridge Analytica, LLC engaged in deceptive practices to harvest personal information from tens of millions of Facebook users for voter profiling and targeting. The Opinion also found that Cambridge Analytica engaged in deceptive practices relating to its participation in the EU-U.S. Privacy Shield framework.

In an administrative complaint filed in July, FTC staff alleged that Cambridge Analytica and its then-CEO Alexander Nix and app developer Aleksandr Kogan deceived consumers. Nix and Kogan agreed to settle the FTC’s allegations. Cambridge Analytica, which filed for bankruptcy in 2018, did not respond to the complaint filed by FTC staff, or a motion submitted for summary judgment of the allegations.

The FTC staff’s administrative complaint alleged that Kogan worked with Nix and Cambridge Analytica to enable Kogan’s GSRApp to collect Facebook data from app users and their Facebook friends. The complaint alleged that app users were falsely told the app would not collect users’ names or other identifiable information. The GSRApp, however, collected users’ Facebook User ID, which connects individuals to their Facebook profiles.

The complaint also alleged that Cambridge Analytica claimed it participated in the EU-U.S. Privacy Shield—which allows companies to transfer consumer data legally from European Union countries to the United States—after allowing its certification to lapse. In addition, the complaint alleged the company failed to adhere to the Privacy Shield requirement that companies that cease participation in the Privacy Shield affirm to the Department of Commerce, which maintains the list of Privacy Shield participants, that they will continue to apply the Privacy Shield protections to personal information collected while participating in the program.

In its Opinion, the Commission found that Cambridge Analytica violated the FTC Act through the deceptive conduct alleged in the complaint. The Final Order prohibits Cambridge Analytica from making misrepresentations about the extent to which it protects the privacy and confidentiality of personal information, as well as its participation in the EU-U.S. Privacy Shield framework and other similar regulatory or standard-setting organizations. In addition, the company is required to continue to apply Privacy Shield protections to personal information it collected while participating in the program (or to provide other protections authorized by law), or return or delete the information. It also must delete the personal information that it collected through the GSRApp.

The Commission voted 5-0 to issue the Opinion and Final Order.

Rafael Moscatel, CRM, IGP, is the Managing Director of Compliance and Privacy Partners, LLC. Reach him at 323-413-7432, follow him on Twitter at @rafael_moscatel or visit http://www.capp-llc.com to learn more.