Facebook Expects to Be Fined Up to $5 Billion by F.T.C. Over Privacy Issues

SAN FRANCISCO — Facebook said on Wednesday that it expected to be fined up to $5 billion by the Federal Trade Commission for privacy violations. The penalty would be a record by the agency against a technology company and a sign that the United States was willing to punish big tech companies.

The social network disclosed the amount in its quarterly financial results, saying it estimated a one-time charge of $3 billion to $5 billion in connection with an “ongoing inquiry” by the F.T.C. Facebook added that “the matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”

Facebook has been in negotiations with the regulator for months over a financial penalty for claims that the company violated a 2011 privacy consent decree. That year, the social network promised a series of measures to protect its users’ privacy after an investigation found that its handling of data had harmed consumers.

The F.T.C. opened a new investigation last year after Facebook came under fire again. This time, the company was accused of not protecting its users’ data from being harvested without their consent by Cambridge Analytica, a British political consulting firm that was building voter profiles for the Trump campaign. Facebook also suffered a  data breach that exposed the personal information of nearly 50 million users.

For the Trump administration, penalizing Facebook would be a defining action. Although President Trump has rolled back scores of business regulations, he and others in Washington — including Democrats — have coalesced around calling for greater scrutiny and enforcement of tech companies. Senator Elizabeth Warren, Democrat of Massachusetts and presidential candidate, has called for the breakup of Amazon, Google and Facebook. And Mr. Trump has sounded alarms over the dominance of the firms and their control over speech and the distribution of information.

But Facebook’s estimate of a fine signaled that a settlement with the F.T.C. was near. The Securities and Exchange Commission typically requires that a company notify investors of any significant financial hits.

For Facebook, a $5 billion fine would amount to a fraction of its $56 billion in annual revenue. Any resolution would also alleviate some of the regulatory pressure that has been intensifying against the company over the past two and a half years.

Even as the negotiations continue, Facebook’s business remains robust. The company said Wednesday that its revenue increased 26 percent in the first quarter to $15 billion from a year earlier. Net income dropped 51 percent from a year ago to $2.4 billion because of the expected one-time charge related to the F.T.C. investigation. The company has more than $40 billion in cash reserves.

New users continue flocking to Facebook. More than 2.7 billion people use one of the company’s so-called family of apps — Facebook, Messenger, Instagram and WhatsApp — each month. The company said about 1.56 billion people use Facebook every day, up 8 percent from a year ago.

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