THE LEX COLUMN: Facebook feeling fine with big fine
Multibillion-dollar penalty will be offset in the longer-term by growing advertising
Facebook has slapped a price range on its Cambridge Analytica data scandal for the first time: $3bn-$5bn. The social media network’s decision to specify the charge it expects to receive from the US Federal Trade Commission (FTC) for privacy violations looks serious, dwarfing FTC fines imposed on tech peers. But it is too small to slow the company down. You do not need to subscribe to Mark Zuckerberg’s new podcast to know Facebook is big enough to absorb this kind of hit without too much fuss. In the past quarter, the company generated more than $5bn in free cash flow. It has over $45bn in cash and cash equivalents lying around. During a call with analysts, the fine was barely mentioned. Meanwhile, better-than-expected revenue and earnings growth were enough to add a theoretical $50bn or so to Facebook’s market capitalisation in after-hours trading. The real question is what the final FTC settlement might look like. Giant-slaying regulators who want to challenge the world’s biggest t...