Twitter, Inc. says the U.S. Federal Trade Commission may soon order to it pay up to $250 million in penalties for misuse of individuals' contact information and email addresses. The potential fines would be for infringement of the company's 2011 deal with the commission to no longer misinform users about how it safeguards their private data.
The U.S. microblogging and social networking service made the disclosure in its second-quarter 10-Q filing with the Securities and Exchange Commission. It said the accusations relate to Twitter's use of phone numbers and/or email addresses provided for safety and security purposes for targeted advertisements between 2013 and 2019.
Twitter had agreed to a settlement with the FTC after hackers were able to penetrate and gain administrative control of the social-media platform on several occasions. The agreement prohibited Twitter from misguiding users about the steps it took to protect their privacy.
Twitter made this public in October saying it was done "inadvertently" and called it an "error." However, the FTC is convinced that Twitter misinformed its clients by not being transparent and disclosing that its data may have been used in such a way.
Twitter estimates a loss of between $150 million and $250 million in settlement fines and has already posted $150 million of that in accrual in connection to the accusations, Reuters reported. Twitter said in the financial filing the matter remained "unresolved" and there could be no guarantee about the timing or the conditions of any final result.
Twitter updated various parts of its quarterly filing to include the possible effects of a recent security breach in which hackers took over accounts of prominent individuals and businesses and used them to solicit digital currency payments.
The online attackers took over dozens of Twitter accounts, including those of former U.S. President Barack Obama and reality TV celebrity Kim Kardashian, to gain bitcoin. Authorities have arrested a 17-year-old in Tampa, Florida, and accused the suspect of masterminding the security breach and fraud.
According to the social-media group, the breach may jeopardize its ability to increase its client base and affect its reputation among advertisers. The security breach may "also affect the market perception of the effectiveness of our security measures," CNBC's Salvador Rodriguez quoted the company as saying in the filing.
