Please ensure Javascript is enabled for purposes of website accessibility
Facebook Anticipates an FTC Privacy Fine of up to $5 Billion
gvw_ap_news
By Associated Press
Published 6 years ago on
April 25, 2019

Share

SAN FRANCISCO — Facebook said it expects a fine of up to $5 billion from the Federal Trade Commission, which is investigating whether the social network violated its users’ privacy.

Facebook has had several high-profile privacy lapses in the past couple of years. The FTC has been looking into Facebook’s involvement with the data-mining firm Cambridge Analytica scandal since last March.
The company set aside $3 billion in its quarterly earnings report Wednesday as a contingency against the possible penalty but noted that the “matter remains unresolved.”
The one-time charge slashed Facebook’s first-quarter net income considerably, although revenue grew 26% in the period. The FTC has been looking into whether Facebook broke its own 2011 agreement promising to protect user privacy.
Investors shrugged off the charge and sent the company’s stock up more than 9% to almost $200 in after-hours trading. EMarketer analyst Debra Aho Williamson, however, called it a “significant development” and noted that any settlement is likely to go beyond a mere dollar amount.
“(Any) settlement with the FTC may impact the ways advertisers can use the platform in the future,” she said.
Facebook has had several high-profile privacy lapses in the past couple of years. The FTC has been looking into Facebook’s involvement with the data-mining firm Cambridge Analytica scandal since last March. That company accessed the data of as many as 87 million Facebook users without their consent.

Facebook Faces Several Others Investigations

The 2011 FTC agreement bound Facebook to a 20-year privacy commitment; violations could subject Facebook to fines of $41,484 per violation per user per day. The agreement requires that Facebook’s users give “affirmative express consent” any time that data they haven’t made public is shared with a third party.
The now-defunct Cambridge Analytica, which provided political data services to the 2016 Trump campaign and others, had wide access to normally private user data. It exploited a Facebook loophole that allowed it to see the data of people’s friends, and not just people who explicitly permitted access when they took a personality quiz. While Facebook did have controls in place that allowed people to restrict such access, they are found buried in the site’s settings and are difficult to find.
In addition to the FTC investigation, Facebook faces several others in the U.S. and Europe, including one from the Irish Data Protection Commission, and others in Belgium and Germany. Ireland is Facebook’s lead privacy regulator for Europe. The FTC is also reportedly looking into how it might hold CEO Mark Zuckerberg accountable for the company’s privacy lapses.
The social network said its net income was $2.43 billion, or 85 cents per share in the January-March period. That’s down 51% from $4.99 billion, or $1.69 per share, a year earlier, largely as a result of the $3 billion charge.

Facebook Plans to Launch a Long-Promised ‘Clear History’ Tool

Revenue grew 26% to $15.08 billion from a year earlier. Excluding the charge, Facebook earned $1.89 per share. Analysts polled by FactSet expected earnings of $1.62 per share and revenue of $14.98 billion.

Revenue grew 26% to $15.08 billion from a year earlier. Excluding the charge, Facebook earned $1.89 per share. Analysts polled by FactSet expected earnings of $1.62 per share and revenue of $14.98 billion.
The company cautioned during a conference call with analysts that it faces “ad targeting headwinds” in the second half of this year. That includes developments such as Europe’s new privacy regulation that could impair hurt the company’s ability to target ads. Facebook also plans to launch a long-promised “clear history” tool that will let users delete their web-browsing tracks from Facebook’s data records while also blocking the social network from tracking the links they click going forward.
Zuckerberg, meanwhile, doubled down on his long-term vision to turn Facebook into a “privacy-focused platform” modeled after its encrypted messaging app WhatsApp. Analysts have questioned the company’s ability to make money if its focus shifts to private communications. But Zuckerberg said the company doesn’t currently use the content of messages for ad targeting anyway.
Facebook’s monthly user base on its flagship service grew 8% to 2.38 billion. Daily users grew 8% to 1.56 billion. The company said about 2.7 billion people used Facebook, WhatsApp, Instagram, or Messenger each month and 2.1 billion people used at least one of its services daily.

DON'T MISS

Automakers to Trump: Please Require Us to Sell Electric Vehicles

DON'T MISS

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

DON'T MISS

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

DON'T MISS

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

DON'T MISS

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

DON'T MISS

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

DON'T MISS

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

DON'T MISS

Death Toll in Gaza From Israel-Hamas War Passes 44,000, Palestinian Officials Say

DON'T MISS

Jussie Smollett’s Conviction in 2019 Attack on Himself Is Overturned

DON'T MISS

Fresno Council Lowers Speed Limits on Friant and Audubon

UP NEXT

Major Storm Drops Record Rain, Downs Trees in Northern California After Devastation Further North

UP NEXT

Newsom Heads to Fresno, a County That Voted for Trump

UP NEXT

Conservative Professors and Students Are Beating CA Community Colleges in Court

UP NEXT

Thousands of University of California Workers Go on 2-Day Strike Over Wages, Staff Shortages

UP NEXT

Gavin Newsom Pledged to Release His Tax Returns Every Year. The Last One Was for 2020.

UP NEXT

California Governor Will Not Make Clemency Decision for Menendez Brothers Until New DA Reviews Case

UP NEXT

Fewer Kids Are Going to California Public Schools. Is There a Right Way to Close Campuses?

UP NEXT

California Voters Reject Measure That Would Have Raised Minimum Wage to Nation-High $18 Per Hour

UP NEXT

Bomb Cyclone Kills 1 and Knocks Out Power to Over Half a Million Homes Across the Northwest US

UP NEXT

With Democracy Supposedly at Stake, California Voters Stayed Away in Droves

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

53 minutes ago

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

1 hour ago

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

1 hour ago

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

2 hours ago

Death Toll in Gaza From Israel-Hamas War Passes 44,000, Palestinian Officials Say

2 hours ago

Jussie Smollett’s Conviction in 2019 Attack on Himself Is Overturned

2 hours ago

Fresno Council Lowers Speed Limits on Friant and Audubon

2 hours ago

How About an Honest Conversation About the Range of Light Monument Proposal?

3 hours ago

UConn Coach Geno Auriemma Breaks NCAA Wins Record With 1,217th Victory

4 hours ago

Fresno Doctors Will Pay $2.4 Million to Settle Kickback Allegations, DOJ Says

4 hours ago

Automakers to Trump: Please Require Us to Sell Electric Vehicles

Three of the nation’s largest automakers, Ford, General Motors and Stellantis, are strategizing with other car manufacturers on how to make ...

8 minutes ago

President Joe Biden with Mary Barra, the chief executive of General Motors, at the Detroit Auto Show, Sept. 14, 2022. President-elect Donald Trump has promised to erase the Biden administration’s tailpipe rules designed to get carmakers to produce electric vehicles, but most U.S. automakers want to keep them. (Doug Mills/The New York Times)
8 minutes ago

Automakers to Trump: Please Require Us to Sell Electric Vehicles

12 minutes ago

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

32 minutes ago

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

Former Florida Attorney General Pam Bondi, speaks before Republican presidential nominee former President Donald Trump arrives to speak at a campaign rally at First Horizon Coliseum, Saturday, Nov. 2, 2024, in Greensboro, NC. (AP/Alex Brandon)
53 minutes ago

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

1 hour ago

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

1 hour ago

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

2 hours ago

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

2 hours ago

Death Toll in Gaza From Israel-Hamas War Passes 44,000, Palestinian Officials Say

Help continue the work that gets you the news that matters most.

Search

Send this to a friend