Social media network Twitter disclosed on Monday that after receiving a draft complaint from the FTC, it expects to be fined as much as $250 million for collecting personal information from users for security reasons and then using the data for targeted advertising purposes.
CNBC reports that social media network Twitter disclosed this week that it expects to be fined as much as $250 million for using the personal information that users provided for security purposes for targeted advertising instead. The announcement comes shortly after Twitter received a draft complaint from the FTC.
Twitter’s stock dropped by approximately 1 percent after hours on the announcement. Twitter made the disclosure in its second-quarter 10-Q financial filing with the SEC, stating that: “The allegations relate to the Company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019. The Company estimates that the range of probable loss in this matter is $150.0 million to $250.0 million and has recorded an accrual of $150.0 million.”
The estimate from Twitter was announced after receiving a draft complaint from the FTC on July 28 for violating the company’s 2011 consent order with the agency. The consent order required Twitter to establish and maintain a comprehensive security program and banned the company from misleading consumers about its security and privacy practices.
In the financial filing, Twitter stated: “The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.” Twitter also updated various aspects of its Q2 filing to reflect the impact of its recent security breach which saw multiple high-profile Twitter accounts hijacked and used to promote a Bitcoin scam.
“This security breach may have harmed the people and accounts affected by it,” the company said in the filing. “It may also impact the market perception of the effectiveness of our security measures, and people may lose trust and confidence in us, decrease the use of our products and services or stop using our products and services in their entirety.”
Breitbart News recently reported that a 17-year-old teenager in Tampa, Florida was arrested in relation to the hack.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address firstname.lastname@example.org