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

Red Deer area residents who were quarantined on cruise ship near Japan back in Canada

Central Alberta residents are safe and test negative for coronavirus

Alberta doctors getting ready for court fight against new pay, benefits deal

EDMONTON — The head of the Alberta Medical Association says it’s preparing… Continue reading

Eyes on police after Trudeau orders blockades torn down, injunctions enforced

All eyes are on Canadian police forces now that Prime Minister Justin… Continue reading

Ontario Tories hold annual policy convention amid union protests

NIAGARA FALLS, Ont. — Labour activists plan to hold a demonstration outside… Continue reading

SARS lessons help Canada prep for COVID-19, but hospital capacity a worry

OTTAWA — Canadian medical experts say the country’s already overstretched emergency rooms… Continue reading

Fashion Fridays: The 8 best quality online stores! Shop the ultimate sales

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Your community calendar

Feb. 19 A Liberation of Holland event is being held at the… Continue reading

Saskatchewan’s chief coroner warns public after fatal drug overdoses in Regina

REGINA — Two deaths and dozens of drug overdoses in Regina have… Continue reading

A champion, again: Humphries wins 3rd women’s bobsled title

Kaillie Humphries of the U.S. is a bobsled champion again, winning her… Continue reading

Canada’s Kingsbury finishes first in moguls for 62nd World Cup victory

TAZAWAKO, Japan — Canada’s Mikael Kingsbury earned his 62nd World Cup victory… Continue reading

Cruise-ship evacuees arrive for quarantine in Canada as first Wuhan evacuees let go

OTTAWA — A plane carrying 129 Canadians and their families who have… Continue reading

Trudeau says rail blockades have to end

TORONTO — Prime Minister Justin Trudeau said Friday indigenous barricades that are… Continue reading

HIV-themed ‘Friends’ edit pulled after copyright claim from Warner Bros.

TORONTO — A Toronto-based HIV-AIDS hospital has pulled an edited “Friends” episode… Continue reading

Spurgeon records hat trick to lead Wild to 5-3 victory over Oilers

Wild 5 Oilers 3 EDMONTON — Jared Spurgeon scored three goals as… Continue reading

Most Read