Facebook signaled Wednesday that it expects to have to pay at least $3 billion to settle an Federal Trade Commission investigation into whether it violated a 2011 consent degree related to its data privacy practices.
That came in its first quarter 2019 financial results.
The FTC has been expected to extract a multi-billion settlement, and Facebook expects it, too.
"In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet." it said. "We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion."
It also signaled that a settlement has not yet been worked out and "there can be no assurance as to the timing or the terms" of a final outcome.
Facebook foes were not satisfied, suggesting that multi-billion settlement was a drop in the bucket.
"[T]he fact that Facebook is expecting a $3 billion-$5 billion fine from the FTC shows they also think the agency is a joke,” said Freedom From Facebook co-chair Sarah Miller. “Facebook would happily pay a one-time fine that is the amount of ads they sell in two weeks, while continuing their shady business practices. Unless the FTC imposes additional structural remedies they will be as useless to protecting the public as Facebook and their shareholders are predicting.”
Sen. Richard Blumenthal (D-Conn.), one of the legislators concerned about the power edge providers in general, and Facebook's privacy practices in particular, agreed more needed to be done, tweeting the following after Facebook revealed its anticipated quarterly loss.
“For too long, Facebook has been able to avoid scrutiny, regulation, and accountability by skillfully deceiving the public and convincing officials that they are capable of self-regulation," said Color of Change senior campaign director Brandi Collins-Dexter. "The FTC's decision to fine Facebook up to $5 billion is the result of years of advocates highlighting the company’s failures, while also pushing the FTC to exercise more of its authority.
"We hope this news from the FTC signals a shift in urgency and severity of punishment that the regulatory agency will take against Facebook and other social media platforms that fail to put the rights and protections of users above profits."
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