Facebook is known as one of the big tech giants for a reason. It owns many companies, including the popular Instagram and WhatsApp. But are these acquisitions anti-competitive? On Thurs., Aug. 19, the Federal Trade Commission (FTC) re-filed a complaint about Facebook from a previous filing made in December 2020. A federal judge dismissed the first case back in June, saying the FTC didn’t have enough evidence to prove that Facebook violated antitrust rules. So, will the lawsuit be successful this time?
Did Facebook violate antitrust laws?
The complaint touches on a few key elements. First, the FTC argues that Facebook bought out or bullied potential competition into submission—especially during the critical moments when mobile apps were first becoming popular. Second, Facebook has two to three billion users worldwide and uses its fast data collecting from Facebook, Instagram, and WhatsApp to provide advertisers with user information. Because of this, Facebook had an open-access software policy, which allowed developers to use Facebook to reach more people. However, as these companies started to prosper, Facebook grew fearful of the competition and implemented a non-compete feature to its open-access software. Developers had to agree not to affect Facebook’s core service, or they wouldn’t be allowed to use its vast network. Companies that decided not to comply fell under due to the lack of outreach to potential users.
Will Facebook get broken up?
Facebook doesn’t seem fazed by this predicament, with its stock not even flinching after the filing. But the FTC is hoping to separate Facebook’s assets—including Instagram and WhatsApp—and have them become their own independent companies. We’ll see what happens, but considering nothing happened with the first case, experts are skeptical that Facebook will be broken up this time. However, the court can implement tighter restrictions on Facebook and how it does business, a scenario some people and business owners are hoping to see.
So, let us know what you think! Do you think the FTC has the evidence to accuse Facebook of being a monopoly? Do you want to see Facebook broken up?
