US trade regulator, the FTC, could fine Facebook up to $5 billion for privacy violations. That’s according to newly surfacing reports.
Back in January, reports surfaced that Facebook could face a “record” fine. At the time, negotiations were ongoing, so insiders weren’t offering more details then that. The legal issue stems from the now notorious Cambridge Analytica scandal last year.
Now, more details are gradually coming to the surface. According to CBS, the fine in question could reach as high as $5 billion. From the report:
Facebook’s costs jumped by $3 billion in the first three months of the year as the company deals with an ongoing Federal Trade Commission investigation into the social network’s privacy practices.
Facebook said on Wednesday that its operating costs rose to $11.7 billion in the three months ending March 31, up 80 percent from the year-earlier period. The company set aside $3 billion to deal with the issue, it said in its quarterly earnings release, noting that the final loss from any government fines could be as much as $5 billion.
The company made a profit of $22 billion last year on $56 billion in total revenue, or a profit margin of 45%. Still, the potential cost of an FTC penalty grabbed the attention of Facebook analysts.
“This is a significant development, and any settlement with the FTC may impact the ways advertisers can use the platform in the future,” eMarketer Principal Analyst Debra Aho Williamson said in a note.
All this comes on the heals of potential legal action in Canada. The Canadian and BC privacy commissioners said that they were taking Facebook to court for breaking various privacy laws in regards to a survey app. That app impacted friends and friends of friends even though they didn’t sign up for it.
This latest development shows how much in the woods Facebook is, legally speaking. With over a half a billion users exposed in a recent data leak, it doesn’t look like the social media giant will be out of those woods any time soon either.
Drew Wilson on Twitter: @icecube85 and Facebook.
