Facebook to pay up to $5 billion fine in FTC privacy investigation
Facebook is expected to pay as much as $5 billion fine as a result of an ongoing investigation by the Federal Trade Commission (FTC) on data breaches by the social networking giant. This would mark the history of the tech industry as the biggest penalty ever against a technology company.
Facebook has recently revealed that its operating costs rose to $11.7 billion in the three months ending March 31, up by 80 percent from the same period last year. Facebook’s costs jumped by $3 billion in the first three months of the current year. However, the company is also expected to pay an estimated fine of $3 to $5 billion. But we couldn’t confirm the actual amount as the inquiry is still pending.
The eMarketer Principal Analyst Debra Aho Williamson considers this a significant development as “any settlement with the FTC may impact the ways advertisers can use the platform in the future.” Meanwhile, Facebook’s chief financial officer, Dave Wehner has affirmed that this “matter is not resolved so the actual amount of payment remains uncertain.”
It must be noted that the amount is manageable for Facebook, as the company has $45.24 billion in cash. However, in a twist of fate, if a penalty by the F.T.C. would also include restrictions on Facebook’s business or impact the company’s highly profitable ad business, this could be fatal for the company.
As compared to the last year, Facebook’s monthly user base has grown by 8 percent, to reach 2.3 billion users. On the other hand, Facebook users in North America stayed nearly flat, at 243 million.
Notably, the ongoing investigation by FTC is seeking damages for any person harmed by Facebook’s targeted advertising practices for housing, which it alleged were discriminatory.