Bracing for what could be a massive fine from the American Federal Trade Commission (FTC), Facebook has reportedly set aside $3 billion to cover expenses associated with the investigation into its privacy practices following a year of data scandals.
Facebook said Wednesday that it expects the ongoing investigation could result in fines ranging from $3 billion to $5 billion.
“This matter is not resolved so the actual amount of payment remains uncertain,” David Wehner, Facebook’s CFO, said on a conference call with analysts on Wednesday following their earnings report. “However we are estimating this range of loss to be $3 to $5 billion.”
The social media giant’s acknowledgment of a massive fine left investors unfazed with shares of Facebook rising as much as 10% in after-hours trading Wednesday following the news – indicating that investors consider the potential amount of the fine to be a mere slap on the wrist that could’ve been much worse.
Facebook users don’t seem too bothered either, with the lastest numbers showing a 7.8% rise globally with 39 million more Daily Active Users in Q1 ’19 vs. Q4 ’18.
— Rich Greenfield, LightShed (@RichLightShed) April 24, 2019