Facebook said on Wednesday that it expects the ongoing investigation from the Federal Trade Commission(FTC) about it’s data practices could result in fines from $3 billion to $5 billion.
The social media giant has released its Q! 2019 earnings and said that it was setting aside $3 billion to $5 billion as contingency expense in connection with the FTC’s investigation.
“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3 billion in connection with the inquiry of the FTC into our platform and user-data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet,”
The matter is still unresolved as there are no assurance of the timing or terms of any final outcome.
The FTC announced in March 2018 that it was launching an investigation into facebook’s data-privacy practices on the heels of the Cambridge Analytica Scandal. The FTC is specifically investigating if facebook has violated a consent decree from 2011 that requires them to receive explicit permission from users in regards to sharing their data with third parties .
The FTC investigation stemmed around Facebook’s acknowledgement in 2018 that a third-party application had handed over the data of up to 50 million platform users to Cambridge Analytica. But since then, the company has faced several other privacy incidents, including in December acknowledging that it had struck broad data-sharing partnerships with more than 150 companies, including Apple, Amazon and Netflix, exempting them from its normal data privacy terms and conditions.
Despite all criticisms Facebook have recently faced over its mishandling of users’ data, Facebook earning and the user base is continually increasing, with the company bringing in more than $15 billion in revenue the first quarter of 2019 alone. It also added 39 million daily active users to its platform.
