Facebook Sets Aside $3 Billion For a Potential FTC Fine (go.com) 67
An anonymous reader quotes a report from ABC News: Facebook is taking a $3 billion charge as a contingency against a possible fine by the Federal Trade Commission. The agency has been investigating Facebook, but has not announced any findings yet. The one-time charge slashes Facebook's first-quarter net income considerably, although revenue grew by 25% in the period. The FTC has been looking into whether Facebook is in violation of a 2011 agreement promising to protect user privacy.
The social network said Wednesday that its net income was 85 cents per share in the January-March period. Revenue grew 26 % to $15.08 billion from a year earlier. Excluding the charge, it earned $1.89 per share. Analysts polled by FactSet expected earnings of $1.62 per share and revenue of $14.98 billion. Facebook's monthly user base grew 8% to 2.38 billion. According to The New York Times, Facebook says it's expected to be fined up to $5 billion for privacy violations, including improper handling of people's data involving Cambridge Analytica, as well as a major data breach.
The social network said Wednesday that its net income was 85 cents per share in the January-March period. Revenue grew 26 % to $15.08 billion from a year earlier. Excluding the charge, it earned $1.89 per share. Analysts polled by FactSet expected earnings of $1.62 per share and revenue of $14.98 billion. Facebook's monthly user base grew 8% to 2.38 billion. According to The New York Times, Facebook says it's expected to be fined up to $5 billion for privacy violations, including improper handling of people's data involving Cambridge Analytica, as well as a major data breach.
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Do you play Starcraft, by chance? I played with someone who talked like you.
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Sold billions of users privacy.
Also they act as mind control of the sheeple / voters / peasants but that they likely don't get any money for from politicians. Not any worth mentioning at least.
Fine? ...fine. (Score:2)
What seems clear, about this fine, is that Facebook doesn't care. Facebook is literally a con artist.
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What seems clear, about this fine, is that Facebook doesn't care. Facebook is literally a con artist.
Facebook is a publically-traded company. They care about their shareholders, whom they cannot con. That's why they disclosed the potential future liability of a fine, and the sequester of $3B to go towards covering it.
The biggest con here is on Facebook users. They are the product, not the customers. Facebook cares, but not enough. Fines will be a first step towards changing their behavior. No doubt regulation will follow.
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A $500 billion fine would have been proportional. As this seem to work, I don't see why people won't break into Mr Facebook's house and snap a few photos of whoever they can catch nude. After all, the punishment would only be about $10.
I find your ideas intriguing, and I wish to subscribe to your newsletter.
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The biggest con here is on Facebook users. They are the product, not the customers.
If Facebook couldn't monetize their userbase, you'd either have to pay for the service or it would be full of obnoxious interstitial ads like network television and free-to-play apps.
I know it sounds like I'm playing devil's advocate here, but seriously think about it. The history of the internet is full of examples of tech companies which folded because they burned through all their venture capital and never found a way to become profitable. People weren't likely to pay a subscription fee for Facebook, a
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What seems clear, about this fine, is that Facebook doesn't care. Facebook is literally a con artist.
Funny, I don't ever remember paying Facebook anything, and they've never sent me a bill. I assumed selling everything they could about me to advertisers was their business model when I signed up, so I never gave them anything beyond the e-mail address I usually use when signing up with spammy companies.
If what they're doing passes for a "con" these days, please explain how politicians can promise the moon and the stars during their campaign, deliver squat once they get elected, and face no repercussions wh
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I assumed selling everything they could about me to advertisers was their business model
See, you thought "advertisers" but they specify "3rd party" in the EULA. I'll bet that you never assumed that Facebook would sell data to a 3rd-party that then compiled tons of data on a large number of people and now sells that data to in order to assist in hiring processes.
If what they're doing passes for a "con" these days, please explain how politicians can promise the moon and the stars during their campaign, deliver squat once they get elected, and face no repercussions whatsoever (aside from potentially losing reelection, if the voters aren't too stupid to notice they fell for a con job).
In order to explain how FaceBook is a con, you want me to explain why politicians lie? Ok. Politicians are business-heads that are literally acting, as if in a play. They're playing into whatever they think you want to hear. I thin
Fines are ineffective... (Score:5, Insightful)
Paying fines is ineffective when you make more money in profit than it costs you to write the checks..
Facebook's problem is that they are falling out of favor due to their egregious privacy behavior in the quest for profit. Where they where once just a two bit company struggling to survive, now they are a huge multi-national company who's business model is based on tracking every thing they can about their "users" any way they can, then selling this information to companies who want to manipulate Facebook's users.
My guess is the fines will continue and money will keep flowing like water down the Mississippi river and where it comes from and goes will be just as clear.
What they need to do is put some personal responsibility on the line too. IF you allow the company to violate the law, then the company gets fined and you get criminal charges and possible jail time. This isn't going to stop until the people who control this have skin in the game. Otherwise, the fines are just a cost of doing business.
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Fine is the correct action, as it affects the shareholders. I'm assuming that the shareholders notice things like "revenue down 16% due to mismanagement" and take actions.
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Fine is the correct action, as it affects the shareholders. I'm assuming that the shareholders notice things like "revenue down 16% due to mismanagement" and take actions.
Facebook's stock price soared upwards today in after-market trading, when the news broke. It looks like shareholders are welcoming the reduction in uncertainty about the issue.
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"Glad revenue isn't down 30%" isn't quite "Happy revenue is down 16%", of course. Reduction in uncertainty is good, but you cannot help but want more money - especially when that money was lost due to mismanagement. You cannot help but feel that Facebook could hire ...less... than $12000M worth of people each year to make sure that it doesn't happen again. This isn't a "cost of doing business" fine - it is $3B dollars for the *quarter*. Facebook can very likely fix this problem for less than that, and s
Re:Fines are ineffective... (Score:5, Interesting)
Facebook's problem is that they are falling out of favor due to their egregious privacy behavior in the quest for profit.
Actually, facebook's problem is that "mom" is on facebook. I work with youth, and VERY few people under 25 are using facebook these days. It's where their parents hang out, post pictures of the dog, and repost political crap. Even their older users have been turning away from the site, and they're certainly not getting any new users... virtually anyone who's going to have an account already has one. They have been in a downward spiral for several years now.
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Many of those kids however go to Instagram.
Which is of course owned by Facebook.
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You are sort of making my overall points.
Facebook is making money hand over fist, despite the fines. They are able to cough up $3 Billion from petty cash apparently. As long as they keep making money, the fines are not going to change their business model. Even $3 Billion won't make a dent.
But I'm also pointing out that Facebook has become somewhat of a social media outcast now. Where they once enjoyed "new kid on the block" and "it's cool to be on Facebook" status, this is starting to wane and the vari
And so it goes (Score:3)
Facebook is taking a $3 billion charge as a contingency against a possible fine by the Federal Trade Commission
I'll take "Today's Cost of Doing Business" for $1,000, Alex.
There is something fundamentally broken... (Score:5, Insightful)
If the point of a fine is to discourage whatever practice the fine is for, when it is not successful in accomplishing that, then the fine should reasonably be made correspondingly higher.
Obligitory (Score:2)
With no admission of guilt.
But what to do with the money???? (Score:1)