Facebook expects $3B-$5B fine over Cambridge Analytica

Source: The Hill | April 24, 2019 | Harper Neidig

Facebook believes that a Federal Trade Commission (FTC) probe into the company’s handling of the Cambridge Analytica scandal could end up costing it between $3 billion and $5 billion.

The social network disclosed to investors in its quarterly earnings report on Wednesday that it had already set aside $3 billion as a legal expense. Facebook said that it had not yet reached a settlement with the agency, and it’s unclear when the case would be resolved.

An FTC spokeswoman declined The Hill’s request for comment, but any multibillion-dollar fine over privacy violations would be a record for the U.S.

It might not do lasting damage to Facebook, however, which revealed on Wednesday that it had made more than $15 billion in revenue through the first three months of 2019.

The legal expense does appear to have eaten into the company’s bottom line for the quarter. Facebook posted $2.4 billion in profits for the last three months, half of its haul in the first quarter of last year, despite a 26 percent revenue increase.

Facebook’s shares shot up nearly 5 percent in after-hours trading after the quarterly earnings was posted.

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