The Information Commissioner’s Office (ICO) have raised concerns over Facebook’s plans to launch their new digital currency, Libra.
The UK’s data watchdog has joined forces with an international group of privacy authorities who want to know “how customers’ personal data will be processed in line with data protection laws”.
The ICO has signed a joint statement with European and US calling for more transparency around Facebook’s proposed digital currency. They want to know how it plans to handle people’s sensitive financial data when it launches its new Libra currency.
The statement signed by six data protection authorities from around the world and the US Federal Trade Commission (FTC), asks Facebook and the 28 other companies behind the Libra project to provide assurances that customers’ personal data will be adequately protected.
The joint statement says: “As representatives of the global community of data protection and privacy enforcement authorities, collectively responsible for promoting the privacy of many millions of people around the world, we are joining together to express our shared concerns about the privacy risks posed by the Libra digital currency and infrastructure,” the joint statement said.
“Other authorities and democratic lawmakers have expressed concerns about this initiative. These risks are not limited to financial privacy since the involvement of Facebook Inc and its expansive categories of data collection on hundreds of millions of users raises additional concerns.
“Strong privacy safeguards are the foundation for innovation in the digital world. As data protection and privacy enforcement authorities we will work together to assert this at a global level, and we encourage all organisations to engage with data protection and privacy authorities when developing services with significant implications for privacy.”
The regulatory concern could now put Facebook’s launch date in jeopardy.
The new cryptocurrency is part of a wider Calibra digital wallet package under development that will be available as a standalone app before mid-2020.
It will initially only allow payments between users, via smartphones or other devices, but Libra will be “open source” – meaning it can be included in existing and other digital wallets.
Information Commissioner Elizabeth Denham has warned that the “ambitious” project “must work in tandem with people’s privacy expectations and rights“.
She said: “Facebook’s involvement is particularly significant, as there is the potential to combine Facebook’s vast reserves of personal information with financial information and cryptocurrency, amplifying privacy concerns about the network’s design and data sharing arrangements.
“We know that the Libra Network has already opened dialogue with many financial regulators on how it intends to comply with financial services product rules.
“However, given the rapid plans for Libra and Calibra, we are concerned that there is little detail available about the information handling practices that will be in place to secure and protect personal information.”
Following high-profile privacy scandals at Facebook, including the sharing of information from 87 million users with Cambridge Analytica, Ms Denham said the company’s involvement was worth paying attention to.
Facebook was fined £500,000 last year for its failure to protect users’ data in the scandal.
Giving evidence to the Senate Banking, Housing and Urban Affairs Committee last month, Facebook’s Libra chief David Marcus said he understood “loud and clear” that people do not want financial details connected to their social media data.
However, Bank of England governor Mark Carney cautiously welcomed the digital currency, saying the Bank “approaches Libra with an open mind but not an open door”