Facebook's Regulatory Woes Aren't Over
Yesterday, Facebook (NASDAQ: FB) reported second-quarter earnings results, which included a $2 billion accrual to help cover the $5 billion penalty that the U.S. Federal Trade Commission officially announced ahead of the release. That settlement had been widely expected following media reports, and Facebook had already eaten a $3 billion charge in the first quarter, leaving $2 billion it still owed.
Put another way, the $5 billion fine (recorded in the general and administrative line item on the income statement) represents 16% of the revenue that Facebook generated in the first half of 2019 and about half of net profits during that time frame. One investigation may now be in the rearview mirror, but Facebook still has more to contend with.
Image source: Facebook.
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