Facebook Braces For Billions In FTC Fines

Overshadowing an otherwise strong first quarter, Facebook said on Wednesday it expects to be fined billions of dollars by the Federal Trade Commission.

The FTC has been investigating Facebook since the Cambridge Analytica scandal erupted last year. Of particular interest to the FTC is whether the company violated a 2011 agreement it made regarding the sharing of user data.

In response to the inquiry, Facebook has taken a $3 billion charge; it is estimating that the fine could approach $5 billion.

“The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” Facebook noted in its first-quarter earnings release.

On the bright side, Facebook’s quarterly earnings and user growth both beat analyst expectations. During the first quarter, the social giant boasted just over $15 billion in revenue, which was up about 25% year-over-year.

Analysts were not surprised by Facebook’s strong performance.

“Advertisers continue to be stuck on Facebook, despite its many challenges,” according to eMarketer principal analyst Debra Aho Williamson. “What they care most about is its vast user base and its targeting capabilities. Both are continuing to provide strong performance for them.”

“While marketers may say privately they do worry about Facebook’s problems with fake news, election meddling, privacy and more, they worry about their own financial health. Facebook is still a major partner in that regard,” Williamson added.

Yet, Williamson said that there is no downplaying the looming FTC fine.

“This is a significant development, and any settlement with the FTC may impact the ways advertisers can use the platform in the future,” she said.

read more/source: https://www.mediapost.com/publications/article/335007/facebook-braces-for-billions-in-ftc-fines.html

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