Facebook Expects a Multibillion-Dollar Penalty for Data Scandal Involvement

Facebook may have to pay billions of dollars for violating its agreement with the US Federal Trade Commission (FTC). The FTC is currently investigating a suspected data breach involving Facebook in 2016. Depending on the results of the investigation, the tech company predicts that it could end up paying a fine that costs about $3 billion to $5 billion. Because of this, Facebook has already allocated $3 billion from the company’s first quarter profit for legal expenditures related to the case. Under Facebook’s agreement with the FTC, the company promised to not divulge its users’ personal information to anyone without consent. However, it was discovered that Facebook may have breached the agreement back in 2016, leading to the current investigation. Allegedly, Facebook allowed UK-based firm Cambridge Analytica to illegally collect data from users without the company’s knowledge. The data was believed to have been used by some politicians to influence the 2016 elections’ results. Using the vast amounts of data from unsuspecting Facebook users, these politicians created campaign materials meant to gain voters’ support. In line with Facebook’s involvement in data scandals, the company has been facing a surge in its expenditures. Aside from the FTC fine, investments in infrastructures and initiatives for better security are also denting the company’s profits. Last March, Facebook CEO Mark Zuckerberg announced the social media site’s transition to a more secured and private environment. He assured site users that the company is continually working to improve its privacy policies and avoid future issues.