Facebook warns of $5bn hit as US investigates how it handles user data

Facebook has warned it could face a hit of up to $5bn (£3.88bn) as a result of an investigation by US regulators into its handling of user data.

The social media giant, which also owns Instagram and WhatsApp, disclosed the estimated cost of the investigation into it by the Federal Trade Commission (FTC) as it published first-quarter financial results.

Facebook reported a 26% rise in revenues to $15.1bn (£11.7bn) – beating analysts’ targets – and estimated that more than 2.1 billion people on average now use its “family” of services every day.

But profits fell by 51% compared with the same period last year to $2.43bn (£1.88bn) as it set aside $3bn (£2.33bn) to cover the FTC inquiry into its “platform and user data practices”.

The FTC has been investigating revelations that Facebook inappropriately shared information belonging to 87 million of its users with political consulting firm Cambridge Analytica.

The probe has focused on whether the sharing of the data with the British firm, and other privacy disputes, violated a 2011 agreement with the regulator to safeguard users’ privacy.

The FTC is yet to announce any findings.

–

Skynews