Facebook sets aside £3.8bn for FTC privacy fine

privacy fine

Facebook has set aside $5bn (£3.8bn) to pay for a privacy fine levied by the US Federal Trade Commission (FTC) over the Cambridge Analytica scandal, eating into the $5bn profit that the company generated over the first quarter of 2019, according to the Drum.

Privacy fine

The firm was hit by a $3bn (£2.3bn) legal bill incurred for disagreeing with the penalty, all of which conspired to feed into a 51% year-over-year decline in net income, to just $2.4bn (£1.8bn).

If they minus this one-time penalty, Facebooks operating margin would have actually increased.

“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,” said the firm, Facebook said in a statement on Wednesday (April 24trh).

“We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”

In March, Facebook’s CEO, Mark Zuckerberg, said it wants to reposition Facebook into a “privacy-focused platform” by combining Messenger, WhatsApp, Instagram, into a single messaging platform.

Regulations

Earlier this month Facebook called for more regulation of internet firms in order to improve the internet, and better protect people.

“Effective Privacy and data protection needs a globally harmonized framework. People around the world have called for comprehensive privacy regulation in line with the European Union’s General Data Protection Regulation, and I agree. I believe It would be good for the internet if more countries adopted regulation such as GDPR as a common framework.” Such regulations should not require firms to store data locally, Zuckerberg said. “And it should establish a way to hold companies such as Facebook accountable by imposing sanctions when we make mistakes.”

Facebook has come under pressure from UK lawmakers to improve their content-moderation process following a succession of recent scandals.

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