The attorney general for the District of Columbia filed a lawsuit on Wednesday against Facebook for allowing Cambridge Analytica, a political consultancy, to gain access to the names, "likes" and other personal data about tens of millions of the social site's users without their permission.
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 lawsuit comes as Facebook continues to face criticism around the world for mismanaging its users' personal information.
A whistleblower at the consultancy, which worked on Trump's presidential campaign, said it used Facebook data to develop profiles of users who were targeted with personalized messages that could have played on their fears.
The DC lawsuit alleges that Facebook failed to properly monitor data-gathering by third-party apps and that its privacy settings aren't easy for people to use.
The Washington lawsuit alleges that about half of the District of Columbia's roughly 700,000 residents had their data scooped up by Cambridge Analytica in violation of local laws.
Facebook has admitted that up to 87 million users may have had their data hijacked by Cambridge Analytica, which shut down weeks after the news emerged on its handling of private user information.
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The firm used a benign-looking quiz app to gather information on Facebook users and their friends, including names, locations, religious and political affiliations and educational backgrounds.
Racine said Facebook had tried to settle the case before he filed the lawsuit, as is typical during investigations of large companies.
The scandal has triggered a series of investigations and broad review by Facebook on how it shares user data with third parties.
Lawsuits of this type take years, however, if Facebook is found guilty, the penalties will be massive. In addition to threatening Facebook's reputation, the suit could potentially cost the company billions. The Facebook CEO was worth around $75 billion at the beginning of the year, but his net worth was recorded at $56 billion on Monday.
The federal investigation involving the Security and Exchange Commission, the Federal Trade Commission and the Justice Department has been underway for months, focusing in part on whether Facebook's representations to investors regarding the Cambridge Analytica scandal have been full and accurate.
It was revealed this week that Facebook's privacy controls had broken down yet again.