"As the FTC assesses how it should approach digital privacy in the coming year, it should consider the reasonableness of certain practices, balanced against consumer expectations and the sensitivity of data in question," the IAB says.

Before Cambridge Analytica became one of Facebook's biggest headaches, the company was dealing with an entirely different privacy controversy -- its own use of photos to create a database matching people's names with their faces.

"Does Google, through this phone, know that I have moved here?" Rep. Ted Poe asked Google CEO Sundar Pichai. "You make $100 million a year, you ought to be able to answer the question."

"This is a pretty high-risk thing to do from a PR perspective but it appears that the growth team will charge ahead and do it," a Facebook executive wrote in an email.