The Record Fine On Facebook: As Damaging As Equivalent To The Company’s One Month Revenue

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The fine on Facebook could be as much as $5 billion – the biggest ever in the history of technology.

After various naive user’s privacy allegations and data breaching accusations, at last, the social media behemoth Facebook Inc. (NASDAQ:FB) is contemplating to handle a heavy penalty of up to $5 billion from the Federal Trade Commission (FTC). This hefty fine is the outcome of an inquiry critique of its internal formulated data privacy policies. Just to understand how damaging the fine on Facebook could be – it is equivalent to one month’s revenue of the social media giant.

Thereby, to have a sharp perspective, the whole of the penalty amount projected is completely not imposed by the FTC. However, FTC has not even declared or mentioned, hitherto, the fine amount. Rather, the proclaimed amount is just an overall estimation of the due that Facebook exposed on this Wednesday in its first fiscal quarter 2019 incomes report. The recent earnings report actually sharpens Facebook’s potential worth with the continued monthly and daily active user additions and a 26% jump in year-over-year revenue, up to $15.1 billion and winning the Wall Street expectations on the whole.

“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices,” Facebook said in its earnings report.

Fine On Facebook: Not A Big Deal?

As according to its curated income report, Facebook declared that the company had set $3 billion apart in expectation of the settlement with the FTC, who actually propelled scrutiny into Facebook’s privacy policy after the case of highly sensitive Cambridge Analytica scandal.

The inquiry focus is encompassing the infringement of a 2011 arbitration, Facebook has made with the FTC that lacked the social media platform to take specific approval from users to share their personal data.

The FTC drove a thorough investigation into Facebook previous year after it has been proved that the company rendered Cambridge Analytica to access the user’s personal data of around 50 million Facebook users without their exact acquiescence.

Presently, both the factions are approaching an unambiguous settlement, besides Facebook predicting the fine to be within $3 billion and $5 billion, respectively. Facebook also remarked that the privacy-related stuff continues to be unresolved and there can be no assurance and certainty as with the time span or the phases of each and all conclusive results.

When Facebook admits the scandals, then the fine will be blazoned as a history for the FTC. That FTC has never signified such an extensive fine on any tech company as of now. And the unusual self-projected penalty amount represents just one month’s revenue of the social media stalwart. It is to be noted that, the UK’s Information Commissioner Office (ICO) has also inflicted £500,000 fine on Facebook covering the Cambridge Analytica scandal.

This particular penalty imposed by FTC on Facebook would found to transcend the $22.5 million civil fines Google paid in 2012. Which is made to rectify FTC charges for supposedly infringing an agreement to promote its social media presence and its corresponding privacy practices.

Notwithstanding all critiques, Facebook has recently confronted across its allegation on misappropriating of users’ data. Despite the embarrassments, Facebook’s income and the broad user base is systematically progressing as per the earnings report. Astonishingly, the company is pouring in more than $15.1 billion in revenue for the first quarter of fiscal 2019, ending March 31 2019, alone. The winning social media behemoth is also found to attract 39 million new daily active users and also the fancy platform.


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