On Monday, Twitter warned its investors that it could be facing a fine of $250 million dollars for misusing users’ data. The tech firm has been accused by the FTC of using personal information for security purposes, rather than targeted advertising.
In its financial filing from the last quarter with the Securities and Exchange Commission (SEC), Twitter received a draft complaint over accusations that it violated its 2011 security agreement with the FTC.
This agreement required Twitter to introduce a strong security program and to ensure more transparency when it comes to protecting users’ personal information.
Twitter had previously been accused of improper use of data. It had used information that was intended for ad targeting purposes for account security, like setting up two-factor authentication.
The company said the matter “remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”
In addition to this, Twitter has come under fire for the impact of its recent hacking scandal. Last month, a number of high-profile accounts were targeted by a hacker and used to promote a cryptocurrency scam.
This, along with other accusations, could seriously damage Twitter’s reputation, as well as its relationship with advertisers and users.
In a statement, Twitter wrote, “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.”
It added: “This security breach may have harmed the people and accounts affected by it. It may also impact the market perception of the effectiveness of our security measures, and people may lose trust and confidence in us, decrease the use of our products and services or stop using our products and services in their entirety.”