Washington top prosecutor sues Facebook over Cambridge Analytica

The attorney general for Washington, DC said on Wednesday the U.S. capital city had sued Facebook Inc. for allegedly misleading users about how it safeguarded their personal data, in the latest fallout from the Cambridge Analytica scandal.

Washington, D.C. Attorney General Karl Racine said Facebook misled users because it had known about the incident for two years before disclosing it. The company had told users it vetted third-party apps, yet made few checks, Racine said.

The world's largest social media company has drawn global scrutiny since disclosing earlier this year that a third-party personality quiz distributed on Facebook gathered profile information on 87 million users worldwide and sold the data to British political consulting firm Cambridge Analytica.

Facebook said in a statement: "We're reviewing the complaint and look forward to continuing our discussions with attorneys general in DC and elsewhere."

Facebook could be levied a civil penalty of $5,000 per violation of the region's consumer protection law, or potentially close to $1.7 billion if penalized for each consumer affected. The lawsuit alleges the quiz software had data on 340,000 D.C. residents, though just 852 users had directly engaged with it.

Shares in the company were down 4.7 percent in afternoon trade on Wednesday.

Privacy settings on Facebook to control what friends on the network could see and what data could be accessed by apps were also deceiving, Racine said.

"Facebook's lax oversight and confusing privacy settings put the information of millions of consumers at risk," he told reporters on Wednesday. "In our lawsuit, we're seeking to hold Facebook accountable for jeopardizing and exposing the information" of its customers.

Racine said Facebook had tried to settle the case before he filed the lawsuit, as is typical during investigations of large companies.

He described Facebook's cooperation as "reasonable," but said that a lawsuit was necessary "to expedite change" at the company.