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Facebook Admits Cambridge Analytica Scandal Cost Up to $5Bln in US Penalties

© AP Photo / Marcio Jose SanchezApril 4, 2013 file photo, Facebook CEO Mark Zuckerberg walks at the company's headquarters in Menlo Park, Calif.
April 4, 2013 file photo, Facebook CEO Mark Zuckerberg walks at the company's headquarters in Menlo Park, Calif. - Sputnik International
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WASHINGTON (Sputnik) - Facebook said in a quarterly statement that it has accrued a cost of $5 billion as a result of the US Federal Trade Commission’s (FTC) investigation into the company’s failure to protect the data of tens of millions of users from being accessed by Cambridge Analytica.

“In the first quarter of 2019, we… recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices,” the quarterly report said on Wednesday. “We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion.”

The matter remained unresolved and Facebook could provide no assurance about the terms of the final settlement it would have to pay, the report said.

“As this expense is not expected to be tax-deductible, it had no effect on our provision for income taxes. Excluding this expense, our operating margin would have been 20 percentage points higher, our effective tax rate would have been 14 percentage points lower,” the report said.

READ MORE: Facebook 'Unintentionally Uploaded' 1.5 Million Email Contacts Without Consent

US federal prosecutors are conducting a criminal investigation into Facebook's policy of granting access to users’ personal data for a number of big IT companies, according to media reports.

A grand jury in New York requested records from at least two manufacturers of smart phones and other devices that are said to have reached partnership agreements with Facebook to access users’ personal data.

The offices of Cambridge Analytica (CA) in central London, after it was announced that Britain's information commissioner Elizabeth Denham is pursuing a warrant to search Cambridge Analytica's computer servers, Tuesday March 20, 2018 - Sputnik International
Cambridge Analytica Closing Operations After Facebook Data Controversy - Reports
The company has come under fire multiple times over the past two years, with Facebook's controversial case being the mining of personal data for UK political consultancy firm Cambridge Analytica from 2015 to 2017. 

Cambridge Analytica is a private UK-based analytical company that uses in-depth data analysis technology to develop strategic communication during election campaigns on the Internet.

The company has worked on various political campaigns, using the data to improve a mechanism that would predict and influence the behavior of voters.  

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