Facebook Inc (FB) Ordered to Stop Collecting Non-Users’ Data; Stock Fell

The stock price of Facebook Inc (NASDAQ: FB) declined more than 4% to $99.75 per share on Monday. The social network giant’s shares appeared to have been negatively impacted by the order of the French privacy watch dog to stop collecting data from people who do not have a user account on Facebook.

The Commission Nationale de l’Informatique et des Libertés (CNIL) said the social network giant violated the French Data Protection Act based on the results of its investigation (onsite and online) and documentary audit on the company’s privacy policy.

The privacy watchdogs of Belgium, Germany, Hamburg, Spain, and the Netherlands are also conducting separate investigations on Facebook. In fact, the 28 privacy watchdogs of the European Union are coordinating their inquiries on the potential violations of EU law by the social network giant.

In November, Facebook lost a battle with Belgium’s privacy watchdog after it was ordered by the court to stop gathering personal information from non-users. The company is appealing the court ruling.

Facebook committed serious violations

In a statement, the CNIL stated that Facebook seriously violated the French Data Protection Act, which prompted the privacy watchdog to release its order against the company publicly.

“The formal notice is made public due to the seriousness of the violations and the number of individuals concerned by the Facebook service (more than 30 million users in France),” according to the CNIL.

Bloomberg quoted a statement from Facebook’s spokeswoman Sally Aldous, who said, “Protecting the privacy of the people who use Facebook is at the heart of everything we do. We are confident that we comply with European Data Protection law and look forward to engaging with the CNIL to respond to their concerns.”

Facebook violations

The CNIL’s investigation found that Facebook violated the French Data Protection act by collecting data on the browsing activities of non-users with prior notice. The company does not inform users that a cookie its set up on their terminal once they visit a public page on its platform.

The French privacy watchdog also found that the social network giant collects data about the religious and political vies as well as the sexual orientation of uses without their consent. It does not also inform users about their rights and the processing of their personal data on the sign up form.

The CNIL said the company sets up cookies for advertising purposes without informing users and obtaining their consent. The company compiles the data on account holders to display targeted advertising.

Furthermore, the French privacy watchdog said Facebook does provide tools for users to prevent the compilation of their data—a fundamental violation of their rights and interests including their right to respect for private life.

Moreover, the CNIL said the company transfers personal data to the United States on the basis on Safe Harbor, but such transfers were declared invalid by the European Union Court of Justice in its ruling on October 6, 2015.