By Michael Teich and Rebecca Heilweil
Regulatory scrutiny and hefty penalties over privacy are proving to be no match for shares of Facebook. The stock jumped 1.14 percent by close of market after the social media giant reported better-than-expected earnings and revenue.
Total revenue rose about 28 percent to $16.9 billion, topping estimates of $16.51 billion. Profit also beat Wall Street's expectations, coming in at an adjusted $1.99 a share.
Facebook's daily and monthly active user count showed no signs of slowing down. Daily average users increased 8 percent to 1.59 billion on average for June, while monthly average users at quarter-end were up 8 percent to 2.41 billion. The company said in its earnings release that it estimates 2.1 billion people now use Facebook, Instagram, WhatsApp, or Messenger every day on average, and that 2.7 billion people use at least one of the apps each month.
The earnings report comes amid news that the company has been issued a historic $5 billion penalty by the Federal Trade Commission as part of a settlement with the social media platform over its repeated consumer privacy missteps.
The fine constitutes the largest the agency has ever issued over privacy breaches.
"This serves as an important deterrent for future violations," said FTC chairman Joe Simmons in at a press conference. "It is just one piece of the relief achieved in this settlement."
Facebook will now face new restrictions on how it handles consumer data, and will be subject to further oversight by the agency.
Following the announcement of the settlement, Facebook announced that the company's vice president of marketing on partnerships, Michel Protti, had been promoted to the company's first chief privacy officer position and will report on the company's privacy compliance to the FTC.
The FTC has also requested that the Department of Justice file a separate complaint — revealed today — over user information that Facebook shared with third-party apps.
Despite the significance of the fine, some technology privacy advocates don't believe the penalty is sufficient.
"It is frustrating that the FTC was not able to achieve more significant changes to Facebook's behavior going forward. Facebook users cannot count on being protected as a result of this settlement," said Charlotte Slaiman, the competition policy counsel at the D.C.-based non-profit Public Knowledge.