By Agence France-Presse
The social networking giant said Wednesday the data of up to 87 million people worldwide -- including more than 300,000 Australian users -- were shared with Cambridge Analytica.
Facebook has been under fire over its handling of users' personal information after reports the British firm harvested the huge amounts of data as part of its work on Donald Trump's 2016 presidential campaign.
"The investigation will consider whether Facebook has breached the Privacy Act," acting Privacy Commissioner Angelene Falk said in a statement.
"Given the global nature of this matter, the OAIC (Office of the Australian Information Commissioner) will confer with regulatory authorities internationally."
Falk said under Australian law, all organisations had to take "reasonable steps" to ensure personal information was being held securely and that customers were notified about the collection and handling of their data.
The bulk of data shared with Cambridge Analytica is from the United States at 81.6 percent, with Australia ranked 10th after countries including the Philippines, Indonesia and India, according to Facebook, which has pledged to give people a clearer picture of how it manages personal information.
Chief executive Mark Zuckerberg is due to testify before the US Congress next week, in what is expected to be multiple congressional hearings over the scandal.
The tech behemoth is also facing probes over the data breach from US consumer protection agency the Federal Trade Commission and from a joint New York-Massachusetts investigation.
The European Union has given Facebook until next week to answer questions over the harvested data, while the London offices of Cambridge Analytica have been searched by Britain's Information Commissioner.