Facebook warned investors on Wednesday that a federal investigation of its privacy practices would likely cost the company between $3 billion and $5 billion.
In a press release associated with its first quarter results for 2019, Facebook announced:
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. … 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 2018, the Federal Trade Commission (FTC) announced their investigation of Facebook following news media reports of user data being inappropriately acquired by Cambridge Analytica, a data analytics firm which sold services to then-presidential candidate Donald Trump’s campaign. It cited “substantial concerns” about Facebook’s treatment of users’ private data.
In March, the New York Times reported on a criminal investigation of Facebook’s data deals with other technology companies.
Facebook’s executives, including its CEO Mark Zuckerberg, deny that political and partisan biases shape the company’s algorithms in determining content for presentation to users.
In 2018, Facebook COO Sheryl Sandberg testified that her company uses “alternative facts” to combat “misinformation” and “fake news” spread across her platform.
Follow Robert Kraychik on Twitter @rkraychik.