Facebook, the biggest social media platform might pay fine up to $5 billion for the privacy breach. The information has been disclosed by Facebook itself in its first-quarter reports of 2019 financial results. It is reported by Facebook that the fine will be between $3 billion to $5 billion. The company has reserved $3 billion as a contingency in its quarterly reports for the penalty that would be paid to the Federal Trade Commission (FTA).
The company was negotiating with the Federal Trade Commission for settlement, but the matter remained unresolved. FTC was reviewing Facebook whether the company violated the policy; however, it has not confirmed yet. The company has faced privacy issues over the past few years, including Cambridge Analytica scandal and privacy breach.
Facebook has set aside $3 billion in legal expenses related to the fine. In an interview, Facebook’s CFO said, “This matter is not resolved, so the actual amount of payment remains uncertain,” “however we are estimating this range of loss to be $3 to $5 billion” he added.
- Facebook is tipped to make $22 billion in profit this year.
- There are nearly 2.38 billion monthly active users.
- Facebook’s stocks have increased by nearly 5% to $190.89 in after-hours trading.
Previously, in 2012, the FTC fined Google $22.5 million for violating an earlier privacy agreement with the company. In the same year, Google reached $50 billion in annual revenue for the first time. But former FTC officials in an interview said that the agency may feel more pressure to make a statement against Facebook.
A settlement made between Volkswagen and FTC ended up at a total of $14.7 billion, which is the largest fine ever.
Last month, CEO Mark Zuckerberg said that the company would emphasize private, encrypted and ephemeral conversations across its products to make the platform more focused on privacy.
“People want to use both private and public platforms,” Zuckerberg said. “Delivering this is both in the interests of our community and our business” he added.
Despite all of its scandals, Facebook’s ad sales business continues to grow- Facebook revenue for the first quarter of 2019 topped $15 billion, 26% more than the previous year. The reason behind the continuous success of Facebook is that advertisers continue to be stuck on Facebook, despite its multiple security issues and problems which makes the platform powerful.
Facebook’s CEO Mark Zuckerberg did not talk about settlement in the quarterly reports. He showed his vision about the future goals of the company that consists of building a new private messaging platform.