On Monday, Twitter warned that it might need to pay a fine of $250 Million by the US Federal Trade Commission (FTC). It is said that Twitter has to pay a fine because of misusing the user’s data like phone numbers, email addresses for advertising.
Twitter May Face Fine of $250 Million
Twitter got a complaint from the Federal Trade Commission (FTC) on July 28, of claiming violations of Twitters order with FTC that it will not misuse the data of the users.
“The allegations relate to the Company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019,” Twitter said its second-quarter financial filing on Monday. “The company estimates that the range of probable loss in this matter is $150 million to $250 million and has recorded an accrual of $150 million.”
Last month, Twitter got the biggest data breach where three young hackers hacked Twitter accounts of high-profile celebrities, politicians like Obama, Joe Biden, Bill Gates, Jeff Bezos, Elon Musk, Apple, and Uber. All of their accounts were hacked in a Bitcoin scam.
Last year in October, Twitter, revealed that it “inadvertently” user users emails IDs and Phone numbers which were provided for security purposes and targeted them with ads. At that time, Twitter said that the practice is ended in last September and $5 billion settlement was done with FTC in 2019. It also set limits on how the company shares the user data with the third parties.
On Monday, Twitter said, that due to Covid-19 pandemic there was a significant decrease in global advertising.
The company also said that the July incident gained a lot of control of many accounts. All the high-profile accounts damaged its reputation and a loss of content, advertisers, revenue and potential legal claims.
After filing, Twitter shared a fell off 1.6% after hours of trading. The stock of the company is up 13.5% year to date as compared to the S&P 500’s SPX, +0.71% 2% gain in 2020.