Twitter Facing $250M FTC Fine for Misuse of User Data
Social media giant's stock dropped by approximately 1 percent after announcement
Social media giant Twitter received a draft complaint from the FTC and disclosed it expects to receive a fine of as much as $250 million for harvesting users' personal information, then using it for targeted advertising purposes.
Just hours after the announcement, Twitter’s stock dropped by approximately 1 percent.
“The allegations relate to the Company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019."
"The Company estimates that the range of probable loss in this matter is $150.0 million to $250.0 million and has recorded an accrual of $150.0 million.”
Twitter made the estimate after it received the draft complaint on July 28, which violates the company’s 2011 consent order with the FTC.
According to the consent order, Twitter was required to maintain a comprehensive security program and banned the company from misleading consumers about its privacy and security practices.
In the financial filing, Twitter stated:
“The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”
To reflect the impact of its recent security breach, which saw high-profile Twitter accounts hacked, Twitter updated various aspects of its Q2 filing.
As NewsThud reported:
Hackers promoting crypto scams took over a number of high-profile Twitter accounts, including Bill Gates, Kanye West, and Elon Musk, who has been a frequent target of would-be crypto scammers.
Joe Biden’s account was also briefly taken over, as was Barack Obama’s.
Accounts belonging to Apple, Uber, Kanye West, Jeff Bezos, and a number of other celebrities and public figures were also hit.
“This security breach may have harmed the people and accounts affected by it,” the company said in the filing.
“It may also impact the market perception of the effectiveness of our security measures, and people may lose trust and confidence in us, decrease the use of our products and services or stop using our products and services in their entirety.”
Twitter has also faced fire from conservatives and President Donald Trump himself for censorship of various accounts including the president's official account.
BREAKING: Twitter disables Trump tweet over copyright complaint— Neon Nettle (@NeonNettle) July 19, 2020
READ MORE: https://t.co/h7Cw9VkNER
The news comes just weeks after Twitter purged thousands of Qanon accounts from its paltform, saying it violated "our multi-account policy, coordinating abuse around individual victims."