Facebook anticipates an FTC privacy fine of up to $5 billion

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.

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 by 25% 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 nearly 5% to $190.89 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.

In addition to the FTC investigation, Facebook faces several others in the U.S. and Europe, including by the Irish Data Protection Commission , and others in Belgium and Germany. Ireland is Facebook’s lead privacy regulator for Europe.

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.

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.

Facebook’s monthly user base grew 8% to 2.38 billion. Daily users grew 8% to 1.56 billion.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Annual Chili Cook Off raises money for Red Deer Hospice Society

The key to making a great chili is preparing the sauce first,… Continue reading

Central Alberta Film Festival set to return Oct. 14-17

Central Albertans will be able to spend four days at the movies… Continue reading

City of Red Deeer seeks ‘long-term, stable’ funding

The City of Red Deer supported the City of Edmonton in its… Continue reading

Central zone down to 16 active COVID-19 cases

Alberta Health Services’ central zone is down to 16

Montreal demonstrators demand climate justice a year after Greta Thunberg speech

MONTREAL — Demonstrators gathered in downtown Montreal on Saturday to protest planetary… Continue reading

Officials report just one active COVID case in Nova Scotia, no new case Saturday

HALIFAX — Nova Scotia is reporting no new cases of COVID-19, leaving… Continue reading

Demonstration in Fredericton as private abortion clinic to lose its doctor

FREDERICTON — A doctor who runs a private abortion clinic in Fredericton… Continue reading

A mind-boggling tale of idiocy

Some people have the IQ of a piece of second-hand furniture

Wilkinson aims to be B.C. premier after cabinet role, working as doctor and lawyer

The B.C. election is Wilkinson’s first as the Liberal party leader

First Nations police services look to throne speech pledge for higher, stable funding

‘I won’t be happy until I hear two words: royal assent’

No winning ticket for Friday night’s $50 million Lotto Max jackpot

Jackpot for the next draw will grow to approximately $55 million

Tiny airborne particles may pose a big coronavirus problem

NEW YORK — At a University of Maryland lab, people infected with… Continue reading

Most Read