Facebook could be hit with $5 billion in fines for privacy violations
Facebook said on Wednesday that a federal investigation into its privacy practices could cost the company as much as $5 billion.
In its quarterly results reported to investors, Facebook said that for now it was setting aside $3 billion to pay in potential penalties to the Federal Trade Commission but that the eventual number could be much higher by the time the FTC’s investigation is over.
“We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” the company said.
The FTC said last year it was investigating reports that the British consulting firm Cambridge Analytica improperly gained access to the data of tens of millions of Facebook users, seven years after Facebook agreed to improve its privacy practices to settle an earlier dispute with the FTC.
The commission is also weighing whether and how to hold Facebook CEO Mark Zuckerberg personally accountable for mismanaging users’ private data, two sources familiar with the discussions told NBC News last week.
Zuckerberg is scheduled to answer questions from Wall Street analysts on a conference call later on Wednesday.
Facebook said in its results that its platform had 2.38 billion monthly active users worldwide at the end of March, an increase of 8 percent from a year earlier.
It reported revenue for the first three months of the year of $15.1 billion, an increase of 26 percent from the same period a year earlier.