Facebook seems to have a new privacy violation every month. From storing millions of passwords in plain text to the infamous Cambridge Analytica scandal, Facebook keeps on messing up.
In February, the Federal Trade Commission (FTC) began negotiating a multi-billion dollar fine with Facebook — mainly due to Cambridge Analytica and the lack of privacy practices following it. The FTC focused on whether Facebook had violated a 2011 agreement to improve privacy on the platform.
Now, it seems that the FTC fine will become a reality. Facebook has set aside $3 billion in anticipation, as revealed by the company’s first-quarter earnings for 2019. Within the report, Facebook wrote that it set aside the money because the company “reasonably estimated a probable loss.”
The company directly identified the FTC’s inquiry into its data practices as the reasoning, adding, “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.”
A $3 billion fine may set a record, but that doesn’t mean it’ll actually have a big impact on Facebook. On Twitter, New York Times tech reporter, Mike Isaac noted that Facebook’s stock is up about 5 percent.
“Assume investors are aware that 3-5 million bucks is….not a lot of money to Facebook when they mint about $15 billion per quarter,” Isaac said in a tweet.
FB stock up 5 percent on this news which is funny
assume investors are aware that 3-5 billion bucks is….not a lot of money to facebook when they mint about $15 billion per *quarter*
this probably alleviates some investor anxiety around regulatory action pic.twitter.com/7rYnlZ1MU5
— rat king (@MikeIsaac) April 24, 2019
Look at it this way: Facebook set aside the total amount it would need for an FTC fine in the year’s first quarter, and the company still earned $2.4 billion in profit. Facebook can go back to business as usual before the fine has even officially hit.
“We had a good quarter and our business and community continued to grow,” Mark Zuckerberg said. “We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet.”
Facebook’s poor privacy practices are concerning for many advocates, but simply relying on fines isn’t likely to do much. For some, this points to the need for change in policies regarding how big tech is allowed to operate.