A report in UK newspaper The Guardian said the case was discovered after a 24-year-old Austrian law student, Max Schrems, requested that Facebook send him a copy of all his personal data.
Facebook sent him a CD containing 1,200 pages of data, including his "friend" and "de-friend" history, and chat sessions.
Schrems discovered that the data returned to him was information that he had deleted from his profile. However, the data was still kept by Facebook.
Schrems then decided to launch an online campaign to force the social media network to adhere to Europe's data privacy laws.
The complaints listed on his site "Europe vs. Facebook" include his example of how Facebook kept deleted user data, and also highlights shortcomings in Facebook's Terms of Services.
The law student also argues that Facebook retains information for much longer than allowed under European law.
Europeans, especially Germans, have voiced concerns before about data privacy, especially Internet marketing practices where consumers are observed, analysed and harvested for profit, with little regard for their privacy.
A spokesperson for Facebook's Irish office said a formal investigation has been launched into Mr Schrems' complaints, and an audit of Facebook's Irish operations will be conducted.
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