Twitter warns investors it could face $250M fine

WASHINGTON

Twitter warned investors in a regulatory filing that it could face a fine of up to $250 million from the Federal Trade Commission (FTC) over its use of user telephone numbers and email addresses for targeted advertising.

Twitter said it received a draft complaint from the FTC on July 28 related "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 estimated the possible loss at being between $150 million and $250 million in the document it filed Monday with the Securities and Exchange Commission.

"The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome," it said.

Twitter acknowledged in October that it had "inadvertently" been using email addresses and telephone numbers it ostensibly collected for account security for targeted advertising. It said it halted the practice Sept. 17.

The company agreed with the FTC in 2011 that it would not mislead users about its security practices.

The microblogging website further warned in its filing of the possible ramifications of a recent high-profile hack that targeted accounts from well-known personalities and companies in a scheme seeking bitcoin payments.

"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," it said.

"It may also result in damage to our reputation, loss of accounts, loss of content or platform partners, loss of advertisers or advertising revenue, or legal and financial exposure, including legal claims, regulatory inquiries or other proceedings. Any of these effects could have a material and adverse impact on our business, reputation and operating results," it added.

Three people were arrested Friday in connection with the hack, including a 17-year-old who prosecutors say was the "mastermind" behind the plot.