Privacy fine set-aside dents Facebook's profit

27 April, 2019, 02:47 | Author: Gerard Cortez
  • Facebook's first quarter earnings for 2019 are in and they come with news of a big FTC fine

Facebook recorded earnings per share of $0.85 compared to estimates of $1.63 EPS. The Redmond, Washington-based company said it had profit of $1.14 per share, beating the $1 per share anticipated by analysts.

Josh Krichefski, CEO at MediaCom, said: "In the midst of criticism over how the company handles the privacy, safety and data of its users, Facebook has managed to deliver steady revenue and user growth numbers for Q1". The company statement says, "The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome".

Ashkan Soltani, an Obama-era FTC chief technology officer, wrote on Twitter that Facebook may be buying a blanket absolution with its fine.

Investors have generally shrugged off issues surrounding data use, regulatory hurdles or political pressure when evaluating Facebook, focusing instead on its robust financials.

The fine indicates regulators believe Facebook violated its 2011 consent agreement with the FTC, in which the social media platform said it would create a comprehensive privacy program and seek "express consent" from users before sharing any private information.

In its first quarter financial report released yesterday, the social networking platform has registered a net profit of $24 Bn.

The potential FTC fine is linked to the Cambridge Analytica scandal that rocked the social network in 2018. "With 2.7bn monthly active users, Facebook's family of apps is still where most consumer-to-brand engagement happens online". The 87 million profiles received by Cambridge Analytica were reportedly used to created profiles of voters used by the 2016 Trump campaign to determine the areas of the country where more money needed to be spent for advertising.

But Facebook was also dogged by another string of revelations of improper data practices, the departure of a key executive, intensifying scrutiny by regulators and lawmakers in the USA and United Kingdom, and worldwide outrage over the company's role in broadcasting and disseminating video of the terrorist shooting in Christchurch that killed 50 Muslims worshippers.

North Korea’s Kim on way to Russian Federation to meet Putin on Thursday
Russia's port city of Vladivostok on the Pacific Ocean, in the meantime, is seeing a number of unusually strict security measures. After officials from the two countries exchanged handshakes, Kim climbed into a black limousine and drove off.

The FTC opened a new investigation previous year after Facebook came under fire again.

Still, speaking to the Times, vocal tech critic Matt Stoller calls $5 billion "a joke of a fine - a two-weeks-of-revenue, parking-ticket-level penalty for destroying democracy".

Facebook, valued at $521.4 billion, is one of the world's largest internet companies.

Analysts said they weren't surprised by Facebook's strong business results.

That's above last quarter's 2.32 billion monthly active users and 1.52 billion daily active users.

Mark Zuckerberg has announced that the company's main focus now is towards the expansion of privacy, safety, encryption, interoperability and secure data storage.

Daily users grew 8 precent to 1.56 billion. It continued with news that Facebook had suffered a major data breach.

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