Facebook paid children as young as 13 to install software that gave it access to everything they do on their phones.
The social media giant paid users between the ages of 13 and 35 to install software that allowed it to collect data on how they used its competitors' apps.
The "Facebook Research" virtual private network routes all of the users' phone and web activity through Facebook's servers for monitoring.
Technology website TechCrunch reports that the company paid users up to €20 (€17.50) per month to use the software.
Facebook told the website it was running the 'Research' program to gather data on usage habits.
The company has since insisted that it wasn’t “spying” on users as they had consented to allowing the access.
It said it got parental consent to access data relating to children.
The revelations come after Apple banned the Facebook app Onavo which functioned in a similar way.
Onavo was removed from the App store last June – when Apple banned apps from collecting data about the usage of other apps unless it was an essential part of the app's function.