Facebook's privacy scandals have led the company to estimate it'll pay between $3 billion to $5 billion in fines as the US Federal Trade Commission probes the company for privacy violations.
The estimate was disclosed in Facebook's first quarter earnings report on Wednesday. For now, the company has decided to set aside $3 billion to pay off potential expenses from the FTC's pending investigation into Facebook.
"We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome," Facebook said in the report. During an earnings call, company executives also noted that the $3 to $5 billion cost was made at the "low end of the range."
The FTC declined to comment on the potential fine. Last March, the US regulator confirmed it was investigating Facebook over the Cambridge Analytica privacy scandal, which exposed the personal data of 87 million people to a political consultancy hired by Donald Trump's presidential campaign.
Reportedly, the FTC is investigating whether Facebook violated a previous 2011 settlement the social network made with the US regulator over earlier privacy violations. Meanwhile, US lawmakers have been critical of the social networking company and its privacy practices. On Tuesday, Senator Ron Wyden (D-Oregon) sent a letter to the FTC, urging the US regulator to hold Facebook's CEO Mark Zuckerberg personally liable for repeatedly mishandling users' personal data.
Other critics say the potential $3 billion to $5 billion fine is too low. "Facebook would happily pay a one-time fine that is the amount of ads they sell in two weeks, while continuing their shady business practices," said Sarah Miller, a co-chair with an activist group called Freedom From Facebook. "Unless the FTC imposes additional structural remedies they will be as useless to protecting the public as Facebook and their shareholders are predicting."
Amid all the criticism and scrutiny, Zuckerberg has plans to offer privacy-focused platforms, which can encrypt your personal information and give you greater control over your data. The goal is to develop the platforms over the next five years, Zuckerberg said in a Wednesday earnings call.
"Our plan is to build this the way we've developed WhatsApp: focus on the most fundamental and private use case —messaging— make it as secure as possible with end-to-end encryption, and then build more ways for people to interact on top of that," Zuckerberg said in his prepared remarks.
Although public trust in Facebook has dropped, the company continues to grow. In the first quarter, the company said its daily active users grew 8 percent year-over-year to 1.56 billion.