Social Media

Facebook sets aside $5bn to cover FTC privacy fine

By John Glenday | Reporter

Meta

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Facebook article

April 25, 2019 | 3 min read

Facebook is to set aside $5bn to cover a mammoth privacy fine levied by the US Federal Trade Commission over the Cambridge Analytica scandal, eating into $15bn of revenue generated over the first quarter.

The social network was further hit by a $3bn legal bill incurred in fighting the fine, all of which conspired to feed into a 51% year-on-year decline in net income to $2.4bn. When the one-off effects of this penalty are excluded however its operating margin would have actually increased.

Facebook

Facebook sets aside $5bn to cover FTC privacy fine

In a statement Facebook wrote: “We estimate that the range of loss in this matter is $3.0bn to $5.0bn,” the company said. “The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”

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In an attempt to get back on the front foot chief executive Mark Zuckerberg has pledged to build a ‘privacy-focused’ private messaging platform by merging the communication portions of Facebook, WhatsApp and Instagram – although this remains at least five years off.

In the UK Facebook has come under mounting political pressure to strengthen its content moderation policies following a succession of scandals.

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