Twitter May Face $250M Fine for Misusing User Data


Social media giant Twitter said on Monday, Aug. 3, that it expects a loss of $250 million related to misuse of user data back in 2013.

In an issue related to a Federal Trade Commission (FTC) complaint, the platform allegedly violated a 2011 consent order with the Commission. On July 28, the social media giant received a draft of complaint from the government body, indicating improper use of users’ phone numbers and email addresses.


According to the complaint, between 2013 to 2019, Twitter has used phone numbers and email addresses for ‘safety and security purposes’ and target ads. The company admitted the practice, saying it was done inadvertently, and considered an error.

Twitter May Face Fine for Misusing User Data

Twitter said in the filing, “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.”


The FTC debunked this practice and said the platform misled the users by not disclosing that their data may be used in this way. Ultimately, Twitter is not protecting the personal information of users, and use these for their own benefit.

The social media platform said this breach could possibly hurt its user growth base, and impact brand reputation among advertisers. An hour after the announcement of the complaint, Twitter’s stocks went south about 1 percent.

“The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” said the company in a statement.

Just recently, the company experienced a security breach that hacked verified accounts, ranging from celebrities, politicians, and high-profile individuals. The attackers were able to take over the said accounts to solicit bitcoin payments.

From the incident, Twitter said it could impact the market perception of the effectiveness of its security measures, and users may lose trust from them. “People may decrease the use of our products and services or stop using our products and services in their entirety,” stated the company.

Twitter recorded an accrual of $150 million to cover the probable loss from the penalty, however, the find could be as high as $250 million. The accrual included accrued and other current liabilities, in the consolidated balance sheet.

The accrual also falls under the general and administrative expenses, in its consolidated operations statement.

On June 30, the company noted in the quarterly filing that it had $7.77 billion of cash equivalents and other short-term investments in marketable securities.