SAN FRANCISCO: Facebook agreed to pay $550 million over a privacy lawsuit as shares dropped even with the social media giant reporting stronger than forecast earnings.
The leading online social network said net income rose seven per cent from a year ago to $7.3 billion, while revenue increased 25 per cent to $21 billion in the final three months of last year.
But in an earnings call Wednesday, Facebook’s Facebook chief financial officer David Wehner confirmed a $550 million settlement “in connection with the Illinois Biometric Information Privacy Act litigation”.
The Illinois settlement — which still requires a judge’s approval — was based on allegations that users’ biometric data was illegally gathered using photo-scanning technology and then stored.
“We decided to pursue a settlement as it was in the best interest of our community and our shareholders to move past this matter,” Wehner said during the call.
The number of people using Facebook monthly climbed eight per cent to 2.5 billion. For all its apps including Instagram, Messenger and WhatsApp, the figure was 2.89 billion.
Despite CEO Mark Zuckerberg reporting stronger than forecast quarterly earnings and user growth during the earnings call, shares dropped more than seven per cent.
“We had a good quarter and a strong end to the year as our community and business continue to grow,” said Zuckerberg.