Big tech companies have long been at the center of possible antitrust rhetoric from regulators and lawmakers on Capitol Hill. This week, the Federal Trade Commission (FTC) took the first step in what could be a potential dismantling of a tech giant, going after Facebook with an antitrust lawsuit.
Predatory Behavior for a Decade
Filed on Wednesday, the FTC’s case alleged that the Silicon Valley tech giant has consistently engaged in predatory and anti-competitive practices for the past decade.
The agency explained that Facebook has a long history of either outrightly purchasing or copying features of platforms, which it believes could jeopardize its market share.
Most of the FTC’s case will hinge on some of Facebook’s most high-profile purchases. The tech giant purchased the video-sharing app Instagram in 22012 for $1 billion, just as the latter was about to take off. It followed that with the purchase of the top mobile messaging service WhatsApp in 2014, a deal reported having been worth $19 billion.
These purchases and a string of much more, have landed Facebook incredible market share in the internet space. Last December, the BBC reported that the Silicon Valley giant owned the four most downloaded apps of the past decade.
Internal documents obtained by the FTC showed that Facebook executives had recognized Instagram as a potential threat to its market dominance before the acquisition. With the growing popularity of smartphones and consumers’ shifted to focus on video sharing, the latter could potentially usurp Facebook. So, the social media giant made the offer.
A similar trend was shown in the WhatsApp case, with the FTC reporting that Facebook had purchased the app to prevent it from mounting its own social media platform. WhatsApp had reportedly been putting pressure on Facebook’s Messenger client, thanks in part to its easier operation. Thus, it had considerable leverage for launching a potential social media platform that could challenge Facebook.
Also, the FTC noted that Facebook also tried purchasing competitors like Snapchat and Twitter. The agency is not looking to break Facebook, forcing divisions like WhatsApp and Instagram to spin-off from the main company.
Libra Suffers the Facebook Curse
This isn’t the first time that Facebook will face antitrust accusations. Mark Zuckerberg, the company’s chief executive, appeared before Congress in July, along with the top brass at other big tech companies like Apple, Amazon, and Google.
These companies have been accused of competitive behavior severally in the past. However, Facebook has had it worse.
The company notably launched Libra, a stablecoin project, last June. While Libra was set to launch in June 2020, regulators from home and abroad restricted it based on several parameters – including Facebook’s record.
While the firm has now rebranded Libra to “Diem” and made several changes, it hopes to launch the asset as a dollar-pegged stablecoin in 2021. However, some foreign regulators have claimed to be unimpressed by the changes so far.