Facebook gets big FTC fine but also big earnings. More here:
SAN FRANCISCO - Facebook Inc said on Wednesday that new rules and product changes aimed at protecting users’ privacy would slow its revenue growth into next year and significantly raise expenses, taking the shine off quarterly revenue results that beat expectations.
But Facebook’s chief financial officer, Dave Wehner, warned that operational changes required by the settlement would be costly. In addition, he said, revenue will be hurt by new limits on usage of consumer data being set by governments around the world and by tech companies on whose systems Facebook relies. He did not elaborate.
Second-quarter revenue rose to $16.9 billion from $13.2 billion a year ago, beating analysts’ average estimate of $16.5 billion, according to IBES data from Refinitiv. “News regarding FTC and data privacy, along with antitrust investigations and additional headline risks [are] likely to continue to hang over the stock, but it looks like the platform still remains a very popular destination for the users,” Morningstar analyst Ali Mogharabi said in an email to Reuters.
The deal, which is subject to court approval, also requires Facebook to document for the FTC any privacy-related decisions about new products. It must establish a privacy committee on its board, and executives must regularly attest to the company’s proper handling of user content.The newly disclosed antitrust probe, which Facebook said it learned of from the FTC last month, shows that other regulatory hurdles remain.
Facebook has expanded programs and promises in response to political pressure on several issues, including policing objectionable content.
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