[Asia Economy Reporter Yujin Cho] Facebook, facing its biggest crisis since its founding due to internal whistleblowing, is now under investigation by the U.S. federal government. Facebook has entered evidence preservation measures and expressed its intention to cooperate with the investigation.
On the 27th (local time), The Wall Street Journal (WSJ), citing multiple sources, reported that the U.S. Federal Trade Commission (FTC) has launched an investigation into recently leaked internal Facebook documents.
WSJ reported that the investigation is focusing on whether Facebook's business practices revealed through the internal documents may have violated the privacy agreement the FTC made with Facebook in 2019.
In 2019, Facebook reached an agreement with the FTC to strengthen privacy protection and data security after allegations arose that the personal information of millions of users had been improperly shared with the political data analytics firm Cambridge Analytica.
Facebook is also currently facing an antitrust lawsuit led by FTC Chair Lina Khan, who is critical of big tech companies. With the added regulatory pressure from this internal whistleblowing on top of the antitrust lawsuit, Facebook’s future looks challenging.
Regarding the FTC’s announcement of the investigation, Facebook issued a statement saying, “We are prepared to respond to regulatory inquiries” and “We will continue to cooperate with the government investigation.”
On the night of the 26th, Facebook announced, “The government and legislature have begun investigations into the company’s operations,” and initiated evidence preservation measures by ordering the preservation of internal documents and communications related to the business since 2016.
Earlier, Frances Haugen, a former Facebook product manager, exposed internal documents known as the “Facebook Files” to the U.S. Congress and the Securities and Exchange Commission (SEC), revealing Facebook’s unfair business practices.
She disclosed that Facebook deliberately did not remove racist remarks by celebrities or fake news posts, and despite being aware of research findings that Instagram, a Facebook subsidiary, could be harmful by increasing suicide rates among teenagers, the company concealed this information.
She particularly criticized Facebook’s content recommendation algorithm, which drives user engagement, as the main culprit in spreading fake news, stating, “Facebook has 100% control over its algorithm.”
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