Battling several privacy violations, Facebook has kept aside Dollars 3 billion, anticipating a record fine coming from the US Federal Trade Commission (FTC) related to the Cambridge Analytica data scandal that involved 87 million users. Without the charge, Facebook would have earned $1.89 per share vs. the $1.69 it reported for the first three months a year ago. However, the actual earnings per share ($0.85) fell short of the estimated amount ($1.63). Facebook noted that "there can be no assurance as to the timing or the terms of any final outcome" in regards to the FTC investigation.
The $3-billion charge is a contingency against a possible fine by the Federal Trade Commission.
The U.S. Federal Trade Commission has been investigating revelations that Facebook inappropriately shared information belonging to 87 million of its users with the now-defunct British political consulting firm Cambridge Analytica.
Total sales from 1Q19 grew by 26%, while monthly users rose 8% taking the total number to 2.38 billion worldwide, Facebook reported.
Yet, Williamson said that there is no downplaying the looming FTC fine.
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Facebook CEO Mark Zuckerberg speaks during the F8 Facebook Developers conference on May 1, 2018, in San Jose, Calif. Wall Street in general tends to forgive one-time accounting dents in companies' earnings reports and focus instead on how the overall business is doing.
Daily active users were in line at 1.56B (up 8%), and monthly active users edged expectations by coming in at 2.38B (also up 8%). The FTC hasn't confirmed the existence of an investigation into Facebook that it reportedly launched after the company's Cambridge Analytica scandal, though The Washington Post reported earlier this year that the agency was considering a "record-setting fine" against the company for not adequately protecting user data.
Representative David Cicilline, who chairs the U.S. House of Representatives Judiciary Committee's subcommittee on antitrust issues, said on Twitter that Facebook was "a repeat offender" and called for an FTC response "strong enough to prevent future violations".
But some lawmakers said a fine would not suffice in punishing Facebook.
"Instagram is now one of the Internet's large scaled digital ad platforms that can sustain growth & operating leverage (even as the platform transitions to Stories/Shopping) for years to come".
It claims to have 1.56bn daily active users, up 2.6pc from 1.52bn in the last quarter and up 8pc year over year. Those issues in part drove Facebook Chief Executive Officer Mark Zuckerberg last month to unveil a major shift to private and ephemeral messaging.