Facebook took a $3 billion charge due to the Federal Trade Commission's inquiry into its business, the company disclosed in its first quarter 2019 earnings report. Facebook estimated the loss could be as much as $5 billion for the company.
"The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome," the company wrote in its release.
The FTC launched an investigation into Facebook after the Cambridge Analytica scandal broke, probing whether Facebook violated a 2011 agreement it made with the agency that required it to gain explicit consent to share users data. Although the FTC has previously declined to confirm the status of the investigation, The Washington Post reported in January that the agency is considering a "record-setting fine" against the company for failing to protect users' data.
While the $3 billion reserve does not mean Facebook has come to an agreement with the FTC, it does imply the company expects a fine of that size is possible. The Post previously reported that Facebook's penalty is expected to surpass the $22.5 million fine the FTC imposed on Google in 2012 for allegedly violating an agreement to improve privacy practices.
Facebook's stock was up 4 percent after hours following the release. The one-time charge put Facebook's GAAP earnings per share at 85 cents.
Facebook is currently thought to be under investigation by several domestic and foreign agencies that could wager fines against the company for its privacy practices.
This story is developing.
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