The UK's data protection authority is launching an inquiry into whether voter's personal data is being misused in political campaigns.
The Information Commissioner's Office (ICO) has also approached Cambridge Analytica, a company which uses big data to "model target audience groups and predict the behaviour of like-minded people".
The company gathers personal data from various sources and builds profiles of individual and their political inclinations. The Observer last week claimed that the firm played key roles in both the US election and Britain's vote to leave the EU.
An ICO spokesperson said: "We have concerns about Cambridge Analytica's reported use of personal data and we are in contact with the organisation."
They added: "We are also conducting a wider assessment of the data protection risks arising from the use of data analytics, including for political purposes, and will be contacting a range of organisations. We intend to publicise our findings later this year."
A spokesman for Cambridge Analytica sent IT Pro a statement saying that it is in touch with the ICO and "happy to demonstrate to the ICO that we are compliant with the UK and EU data law."
He added: "Cambridge Analytica did not do any work (paid or unpaid) for the Leave.EU campaign. In 2015 the company was in discussions to potentially work with them. That work did not go ahead."
The Observer also claimed that US billionaire Robert Mercer, who gave funding to President Donald Trump's election campaign and who is a long time friend of Nigel Farage, part-owns Cambridge Analytica, and encouraged its use it to provide advice for the Leave campaign on how to target swing voters via Facebook.
Cambridge Analytica has denied it has played any role during the referendum campaign, which it would have had to declare to the Electoral Commission.
On the website Campaign, Cambridge Analytica explained how it had helped Ted Cruz win the Iowa Caucus in February 2016.
"CA was able to provide the campaign with predictive analytics based on more than 5,000 data points on every voter in the United States," it said. "From there, CA's team of political consultants and psychologists guided the campaign on what to say and how to say it to specific groups of voters."
In Europe, companies are not allowed to use third party data without seeking consent, whereas in the US this is the norm.
