Alphabet Inc’s Google will shut down the consumer version of its failed social network Google+ and tighten its data sharing policies after announcing on Monday that private profile data of at least 500,000 users may have been exposed to hundreds of external developers.

The company said in a blog on Monday it had discovered and patched the leak in March of this year and had no evidence of misuse of user data or that any developer was aware or had exploited the vulnerability.

Shares of its parent company Alphabet Inc, however, were down 1.5 percent at $1150.75 in response to what was the latest in a run of privacy issues to hit the United States’ big tech companies.

The Wall Street Journal reported earlier that Google had opted not to disclose the issue with its Application Program Interfaces (API) partly due to fears of regulatory scrutiny, citing unnamed sources and internal documents.

Google said it had reviewed the issue, looking at the type of data involved, whether it could accurately identify the users to inform, whether there was any evidence of misuse, and whether there were any actions a developer or user could take.

“None of these thresholds were met in this instance,” it said. “We found no evidence that any developer was aware of this bug, or abusing the API, and we found no evidence that any Profile data was misused.”

Under the European Union’s General Data Protection Regulation (GDPR), if personal data is breached, a company needs to inform a supervisory authority within 72 hours, unless the breach is unlikely to result in a risk to the rights and freedom of users.

“It seems like the downside risk of having a story that says they intentionally hid information about a major breach from users is bigger than the upside of avoiding scrutiny,” said Geoffrey Parker, an engineering professor at Ivy League college Dartmouth.

“I wonder if there wasn’t more depth to the internal debate.”

The issue was discovered and patched in March as part of a review of how Google shares data with other applications, Google said in a blog post. No developer exploited the vulnerability or misused data, the review found.

Shares of its parent company Alphabet closed down 1 percent at $1155.92 following the latest in a run of privacy issues to hit big U.S. tech companies.

The Wall Street Journal reported earlier that Google opted not to disclose the security issue due to fears of regulatory scrutiny, citing unnamed sources and a memo prepared by Google’s legal and policy staff for senior executives.

Google feared disclosure would invite comparison to Facebook Inc’s leak of user information to data firm Cambridge Analytica, the Journal reported, adding that Chief Executive Sundar Pichai had been briefed on the issue. Google declined to comment beyond its blog post.

Google said on Monday none of the thresholds it requires to disclose a breach were met after reviewing the type of data involved, whether it could identify the users to inform, establish any evidence of misuse, and whether there were any actions a developer or user could take to protect themselves.

Security and privacy experts and financial analysts questioned the decision.

“Users have the right to be notified if their information could have been compromised,” said Jacob Lehmann, managing director at consulting and accounting firm Friedman CyZen. “This is a direct result of the scrutiny that Facebook dealt with regarding the Cambridge Analytica scandal.”

 

FACEBOOK CHALLENGER

Google+ launched in 2011 as the advertising giant grew more concerned about competition from Facebook, which could pinpoint ads to users based on data they had shared about their friends, likes and online activity.

Google+ copied Facebook with status updates and news feeds and let people organize their groups of friends into what it calls “circles.”

But Google+ and the company’s other experiments with social media struggled to win over users because of complicated features and privacy mishaps.

Facebook introduced a feature that allowed users to connect their accounts with their profiles on dating, music and other apps.

 

REGULATORY INTEREST

Google said a software glitch in the social site gave outside developers potential access to private Google+ profile data between a major redesign in 2015 and March 2018, when internal investigators discovered and fixed the issue.

The affected data was limited to static, optional Google+ Profile fields including name, email address, occupation, gender and age.

The WSJ report said that a memo, prepared by Google’s legal and policy staff and shared with senior executives, warned that disclosing the incident would likely trigger “immediate regulatory interest” and invite comparisons to Facebook’s leak of user information to data firm Cambridge Analytica.

Allegations of the improper use of data for 87 million Facebook users by Cambridge Analytica, which was hired by President Trump’s 2016 US election campaign, has hurt the shares of the world’s biggest social network and prompted multiple investigations in the United States and Europe.

Google Chief Executive Officer Sundar Pichai was briefed on the plan not to notify users after an internal committee had reached that decision, according to the WSJ.

Google came under criticism for refusing to send a top executive to a Senate Intelligence Committee hearing on Sept. 5 about efforts to counteract foreign influence in US elections and political discourse.

“I think Google does have a public relations issue and this now makes their lack of openness even worse,” Ivan Feinseth, an analyst at Tigress Financial Partners said.

Facebook’s chief operating officer and Twitter’s chief executive testified at the hearing, where an empty chair was pointedly left for Google after the committee rejected Google’s top lawyer as a witness.