The inquiry into Facebook’s data collection could cost as much as $5 billion, the company said in latest earnings release
Facebook’s costs jumped by $3 billion in the first three months of the year as the company deals with an ongoing Federal Trade Commission investigation into the social network’s privacy practices.
Facebook said on Wednesday that its operating costs rose to $11.7 billion in the three months ending March 31, up 80 percent from the year-earlier period. The company set aside $3 billion to deal with the issue, it said in its quarterly earnings release, noting that the final loss from any government fines could be as much as $5 billion.
The company made a profit of $22 billion last year on $56 billion in total revenue, or a profit margin of 45%. Still, the potential cost of an FTC penalty grabbed the attention of Facebook analysts.
“This is a significant development, and any settlement with the FTC may impact the ways advertisers can use the platform in the future,” eMarketer Principal Analyst Debra Aho Williamson said in a note.
