The Observer said Cambridge Analytica used the data, taken without authorisation in early 2014, to build a software program to predict and influence choices at the ballot box.
The newspaper quoted whistleblower Christopher Wylie, who helped set up Cambridge Analytica and worked with an academic at Cambridge University to obtain the data, as saying the system could profile individual voters to target them with personalised political advertisements.
The more than 50 million profiles represented about a third of active North American Facebook users, and nearly a quarter of potential US voters, at the time, the Observer said.
The New York Times said interviews with a half-dozen former Cambridge Analytica employees and contractors, and a review of the firm's emails and documents, revealed it not only relied on the private Facebook data but still possesses most or all of it.
The Observer said the data was collected through an app called thisisyourdigitallife, built by academic Aleksandr Kogan separately from his work at Cambridge University.
Through Kogan's company Global Science Research, in collaboration with Cambridge Analytica, hundreds of thousands of users were paid to take a personality test and agreed to have their data collected for academic use, the Observer said.
However, the app also collected the information of the test-takers' Facebook friends, leading to the accumulation of a data pool tens of millions-strong, the newspaper said.
It said Facebook's "platform policy" allowed only collection of friends data to improve user experience in the app and barred it from being sold on or used for advertising.
Facebook said it had suspended Cambridge Analytica and its parent group Strategic Communication Laboratories after receiving reports they did not delete information about Facebook users that had been inappropriately shared.
The Trump campaign did not respond to a request for comment. Facebook did not mention the Trump campaign or any other campaigns in its statement.
- Reuters, AAP
