Facebook Expecting Record $5 BILLION Fine from FTC for Privacy Violations
The penalty is a record for a tech company in the US
Facebook told investors that it is expecting up to $5 billion in fines over violations of users' privacy, according to reports.
The penalty is a record for a tech company in the US.
Citing "a $3.0 billion legal expense accrued in the first quarter of 2019 related to the ongoing US FTC matter" in the tech giants quarterly financial statement, Facebook admitted the fine might be even higher.
"We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion," the statement reads.
"The matter remains unresolved, and there can be no assurance as to the timing or terms of any outcome."
The Federal Trade Commission launched an official investigation into Facebook last month, resulting in billions being knocked off the value of Mark Zuckerberg's firm.
The regulator's acting director, Tom Pahl, said the social media giant would be investigating in a statement.
Investigators reportedly found mountains of evidence that Facebook violated a 2011 FTC agreement which required it to obtain permission from users before sharing their data with third parties
The eye-watering penalty would be unprecedented for the FTC, which has been easy on tech giants like Google and Amazon off easy so far.
The largest ever fin leveled against tech for was $22 million slap on the wrist for Google in 2012 for failure to abide by a previous FTC agreement.
According to RT: A multi-billion-dollar fine against Facebook would reflect the severity of its violations – breaching an existing agreement that was reached with the FTC after a previous investigation had found the company hurt users by failing to safeguard their personal information.
The Facebook investigation began in March 2018 in response to the Cambridge Analytica revelations, but several additional privacy scandals have come to light since then, putting pressure on the FTC to impose the maximum in fines.
The regulator can ask for up to $41,000 for each violation it finds. If Facebook fails to settle – and the Washington Post reported earlier this year that they had "expressed concern" with the FTC's demands – the case could go to court.
While $5 billion may not seem like much next to the $15.1 billion in revenue Facebook has reported for the first quarter of 2019, such penalties do add up, particularly as Facebook has seen its value decline in response to a seemingly endless string of scandals and European regulators have begun to impose limitations on its ability to hoover up users' data unimpeded.
Facebook founder Mark Zuckerberg has pivoted to reformist rhetoric as he waits for the hammer to fall.
"We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet," a statement included with the earnings numbers claims.
Meanwhile, Facebook has hired one of the reported architects of the US PATRIOT Act – widely considered to have crippled Americans' privacy rights – as its new general counsel.