Facebook facing federal investigation over Cambridge Analytica data scandal

MENLO PARK, Calif. -- Facebook held a crisis meeting at its headquarters on Tuesday, but neither of its two top executives -- Mark Zuckerberg and Sheryl Sandberg -- attended. The company now faces a federal investigation amid word that it may have mishandled data for more than 50 million users.

That information was later used by Cambridge Analytica, a consultant to President Trump's 2016 campaign. Undercover video broadcast Tuesday by Britain's Channel 4 reveals Cambridge Analytica CEO Alexander Nix boasting of his company's involvement in the 2016 presidential campaign.

"Have you met Mr. Trump?" an undercover journalist asked.

"Many times. We did all the research, all the data, all the analytics, all the targeting," Nix said.

Cambridge Analytica suspended Nix on Tuesday, but Facebook could be in deeper trouble. In 2011, they signed a consent decree with the Federal Trade Commission (FTC) promising to not allow unauthorized used of users' profile data. Nix's admission suggests Facebook may have violated that agreement. 

"I think there is a giant problem for Facebook, and frankly for democracy in the United States," said Roger McNamee, an early investor in Facebook who is now a critic of the company. 

"Users had no idea that Cambridge Analytica was accessing this data. It's a clear violation of the 2011 consent order," said Sam Lester of the Electronic Privacy Information Center. 

"Potentially it could cost them $40,000 for every offense, times 50 million," McNamee said.

That could total more than $2 trillion in fines. McNamee said Zuckerberg's silence is disappointing.

"You don't get to make a billion dollars -- or in Mark's case tens of billions of dollars -- without being responsible for your actions," McNamee said.

A Facebook spokesperson said Tuesday that the entire company is "outraged" they were deceived by Cambridge Analytica, but lawmakers in Congress and the British parliament are holding Facebook responsible, and want answers directly from Zuckerberg.

  • John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.