The appointment of Lina Khan as the chair of the US Federal Trade Commission (FTC) appears to have ushered in a new wave of antitrust inquiries targeting US tech giants. The Independent reports that the Commission has re-filed its complaint against Facebook, arguing that the company should be broken up and forced to sell Instagram and WhatsApp.
The revised complaint argues that Facebook has a monopoly over social networking in the US and argues that Facebook has looked to make it difficult for other companies to compete.
The complaint is partly redacted, and the FTC’s filing asks that it is sealed for 10 days.
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The new case comes amid mounting scrutiny over the size and power of Facebook’s empire, and the way that it has bought up competitors as they have grown.
The case makes reference to an email from Mark Zuckerberg, sent in 2008, in which he said “it is better to buy than compete”. The FTC’s lawyers argue that Facebook has acted in accordance with that strategy, tracking its rivals and buying them when they become big enough to be threats.
Those purchases have included Instagram and WhatsApp, both of which today make up a large part of the Facebook company. Mark Zuckerberg has been active in looking to integrate those three apps, in the name of ease of use – though critics have pointed out that such technological developments would make it harder for regulators to break up the three apps.
The case accuses Facebook of operating a monopoly for “personal social networking services” in the US, because it controls both Facebook and Instagram. It notes that the closest competitor is Snapchat, but that has far fewer users than either of the two Facebook social networking apps.
The lawsuit also accuses Facebook of continuing to operate in such a way and that it uses the companies it has bought to create a “protective ‘moat’ around its personal social networking monopoly”. It will continue to buy or “kneecap” companies if it is not stopped, the FTC says.
In its conclusion, it asks that Facebook be asked to sell its businesses, including Instagram and WhatsApp and potentially others, to ensure they are able to properly compete. It also asks that Facebook be restricted from making similar purchases in the future, including by rules that would force the company to seek approval if it wants to make similar deals.
Khan’s appointment in June has been driving uneasy feelings through the tech industry, as she has been, prior to her appointment, a big critic of the tech giants.
Facebook and Amazon had requested that Khan recuse herself from FTC’s antitrust investigations into their companies, on the argument that her past criticisms of them meant she “wouldn’t be a neutral or an impartial evaluator” of antitrust issues.
Khan believes that antitrust enforcement in the US has been lax for years, allowing the big tech to indulge in anticompetitive and monopolistic practices unchallenged. These recent moves targeting the big tech shows her determination to change the status quo in Silicon Valley.
If Facebook sells off Instagram and Whatsapp, what remains of Facebook then, the old, boring Facebook? Whatsapp is free, and if it doesn’t sell ads or hawk data, what will sustain a platform of that size for few years without going under?
This looks more like a political activism, just like when Trump appointed who didn’t believe in climate change to head energy department. Nothing is new.
Everything will end up at the Supreme Court, neither FTC nor WH can break up these behemoths, so all the parties will meet in courts, more money for the lawyers…