Facebook has suspended a Boston analytics firm from its site and says it is investigating whether the company's contracts with the US government and a Russian non-profit organisation violated policies, the Wall Street Journal has reported.
The firm, Crimson Hexagon, says its platform allows clients - which include major US corporations - to analyse audiences and to track brand perception and campaign performance.
Citing people familiar with the business, the paper said the government contracts of Crimson Hexagon, which pulls public data from Facebook, were not approved by Facebook in advance.
Since 2014, US government agencies have paid Crimson Hexagon more than $800,000 for 22 contracts, the paper reports, citing government procurement data.
Crimson Hexagon has sold its proprietary analytics platform abroad, the paper says, including to Turkey and Russia, where in 2014 it worked with a non-profit tied to the government.
It said Crimson Hexagon appears at least once to have mistakenly received private data from Facebook's Instagram service.
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Facebook had requested further evidence from Crimson Hexagon but the papers quotes a spokesman for the social network as saying that "based on our investigation to date, Crimson Hexagon did not obtain any Facebook or Instagram information inappropriately."
Chris Bingham, a Crimson Hexagon executive, wrote in a blog post on Friday that his firm only collects publicly available social media data, an act which is "completely legal."
Mr Bingham says his firm routinely vets potential government customers to ensure they comply with policies of its "data partners" like Facebook.
"For example, there are special sensitivities about how government agencies can use online public data, even though that same data is freely accessible by others," he wrote.
Facebook acknowledged this month that it was facing multiple inquiries from US and British regulators about a scandal involving the British consultancy Cambridge Analytica.
In Facebook's worst ever public relations disaster, it admitted that up to 87 million users may have had their data hijacked by Cambridge Analytica, which was working for US President Donald Trump's 2016 campaign.
Cambridge Analytica, which denies the accusations, has filed for bankruptcy in the United States and Britain.
Facebook CEO Mark Zuckerberg said in May that he was rolling out privacy controls demanded by European regulators to Facebook users worldwide because "everyone cares about privacy."
Facebook and other online platforms have also been under pressure to better protect against being used to spread misinformation or promote division, as US intelligence leaders say Russia did during the 2016 US presidential campaign.
Companies 'should not be trusted' to self-regulate on data protection
Director of the Insight Centre for Data Analytics at University College Cork, Professor Barry O'Sullivan, said when it comes to data privacy and data protection, social media platforms should not be allowed to regulate themselves.
Prof O'Sullivan said: "We've seen a company that's struggling to get on top of these issues over the last number of months.
"We've seen a variety of different controversies that Facebook has been caught offside on, so they are reacting, they are not being proactive, they are not getting on top of the issues before the public gets to them."
He added: "We need to really take the oversight of these organisations seriously and they should not be at the table."
Among measures that Ireland can take to improve regulation in the area include establishing the role of a Digital Safety Commissioner, according to Prof O'Sullivan.
"That is a role that needs to have oversight and comment on (data privacy), and enforce whatever regulation we introduce.
"These companies do have a role in the process but not in the regulation process itself," he said.
