Twitter caught using users personal information to target advertising instead of security; warns about possible $250 million FTC fine

Twitter disclosed Monday that it expects to lose as much as $250 million after the social giant was caught using personal information users to target advertising instead of using the same information for security purposes. The announcement comes after the company received a draft complaint from the Federal Trade Commission (FTC) alleging violations of the its 2011 consent order with the FTC and the FTC Act.

In a disclosure as part of its second quarter 10-Q financial filing with the SEC, Twitter said, “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. The Company estimates that the range of probable loss in this matter is $150.0 million to $250.0 million and has recorded an accrual of $150.0 million.”

On July 28, FTC sent a draft complaint to Twitter for violating the company’s 2011 consent order with the federal agency. That consent order required Twitter to establish and maintain a comprehensive security program and barred the company from misleading consumers about the extent of its security and privacy practices.

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

Below is an excerpt from the filing.

On July 28, 2020, the Company received a draft complaint from the Federal Trade Commission (FTC) alleging violations of the Company’s 2011 consent order with the FTC and the FTC Act. 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. The Company estimates that the range of probable loss in this matter is $150.0 million to $250.0 million and has recorded an accrual of $150.0 million. The accrual is included in accrued and other current liabilities in the consolidated balance sheet and in general and administrative expenses in the consolidated statements of operations. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.