The social network says it is "moving aggressively to determine the accuracy of claims" about data gathered by the firm
The controversial data firm Cambridge Analytica has been suspended from Facebook, amid accusations they failed to delete Facebook users' data.
Cambridge Analytica is an offshoot of Strategic Communication Laboratories (SCL), which has also been suspended.
American billionaire Robert Mercer - a major supporter of Donald Trump's presidential campaign and the right-wing Breitbart News website - is a co-owner of the data firms.
Cambridge Analytica firm has faced scrutiny over its role in several recent political campaigns in the UK and US, including Donald Trump's presidential campaign.
In a statement today, the company said it only uses data "obtained legally and fairly".
Facebook's legal counsel Paul Grewal explained the suspension of Cambridge Analytica in a blog post.
He said: "In 2015, we learned that a psychology professor at the University of Cambridge named Dr. Aleksandr Kogan lied to us and violated our Platform Policies by passing data from an app that was using Facebook Login to SCL/Cambridge Analytica, a firm that does political, government and military work around the globe."
According to Mr Grewal, Dr Kogan requested and gained access to information who chose to download his app 'thisisyourdigitalapp' - a personality prediction described as 'a research app used by psychologists.
Information accessed included details of the location set by the user on their profile and content they liked, as well as 'limited information about friends' depending on their privacy settings.
Mr Grewal explains: "Although Kogan gained access to this information in a legitimate way and through the proper channels that governed all developers on Facebook at that time, he did not subsequently abide by our rules. By passing information on to a third party, including SCL/Cambridge Analytica and Christopher Wylie of Eunoia Technologies, he violated our platform policies.
"When we learned of this violation in 2015, we removed his app from Facebook and demanded certifications from Kogan and all parties he had given data to that the information had been destroyed. Cambridge Analytica, Kogan and Wylie all certified to us that they destroyed the data."
However, Facebook now says it has now received reports that not all data was deleted.
Mr Grewal notes: "We are moving aggressively to determine the accuracy of these claims. If true, this is another unacceptable violation of trust and the commitments they made. We are suspending SCL/Cambridge Analytica, Wylie and Kogan from Facebook, pending further information."
He warns that the social network will take "legal action if necessary to hold them responsible and accountable for any unlawful behaviour".
In a statement, Cambridge Analytica insisted it complies with Facebook's rules.
We only receive and use data obtained legally and fairly. https://t.co/YD8kFXCFTL— Cambridge Analytica (@CamAnalytica) March 17, 2018
The company said: "Cambridge Analytica fully complies with Facebook’s terms of service and is currently in touch with Facebook following its recent statement that it had suspended the company from its platform, in order to resolve this matter as quickly as possible.
"Cambridge Analytica's Commercial and Political divisions use social media platforms for outward marketing, delivering data-led and creative content to targeted audiences. They do not use or hold data from Facebook profiles."
According to the company, it contracted a firm called Global Science Research (GSR) to obtain data, in line with UK data legislation.
Cambridge Analytica adds: "When it subsequently became clear that the data had not been obtained by GSR in line with Facebook’s terms of service, Cambridge Analytica deleted all data received from GSR.
"We worked with Facebook over this period to ensure that they were satisfied that we had not knowingly breached any of Facebook’s terms of service and also provided a signed statement to confirm that all Facebook data and their derivatives had been deleted."
The firm also says none of the data was used as part of the services it provided to Donald Trump's presidential campaign.