The Federal Trade Commission has launched new legal action against Facebook, which alleges that the company is “illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct”.
The suit specifically focuses on Facebook’s acquisitions of Instagram and WhatsApp, and calls for a divestment of the two apps, which would break-up Facebook into separate parts.
As per the FTC:
“Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategy – including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers – to eliminate threats to its monopoly. This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition.”
The action claims that Facebook has total dominance over the ‘social advertising’ market, which it has solidified through its acquisitions and intimidatory behavior. Facebook CEO Mark Zuckerberg faced questions on the same from a House Judiciary Committee earlier this year, which, among other findings, suggested that Facebook purchased Instagram to ‘neutralize’ a competitor‘.
That initial examination, however, did not set out any course for legal action, which is now being implemented by the FTC. That could eventually lead to Facebook being forced to sell off Instagram and WhatsApp, significantly reducing its market presence.
Which would be a drastic step, and I’m not sure anyone believes that it will go that far, at least at this stage. But it’s a real possibility, laid out within the terms of the FTC complaint.
“The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions.”
Facebook issued a quick response via tweet, but says that it will provide a more in-depth reply shortly.
We’re reviewing the complaints & will have more to say soon. Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day.
— Facebook Newsroom (@fbnewsroom) December 9, 2020
In the past, Facebook has successfully argued that it’s only one part of a much broader digital advertising landscape, and that it can’t truly be considered monopolistic given the breadth of options available, both for advertisers and consumers.
One specific argument could be the rise of TikTok – despite the FTC’s claims that Facebook has stifled competition, TikTok has risen to become a rival for Facebook in various respects. Snapchat, too, has grown in the shadow of The Social Network – but then again, in both cases, Facebook did try its best to limit each app’s growth.
Facebook made an offer to acquire Snapchat back in 2013, which CEO Evan Spiegel famously refused, while Facebook reportedly sought to sow questions around TikTok’s Chinese ownership with US Senators, which lead to an official investigation being launched into the app. Facebook has also launched copycat functions of each within its apps to blunt their respective growth.
Yet, even so, TikTok and Snapchat have succeeded in many respects. Can Facebook then use this as an argument that it doesn’t have a definitive hold on the market?
The legal technicalities will go into far more depth, and it’s impossible to know which way the case will lean. But it’s a significant challenge for Zuck and Co, with major impacts at stake.
Will Facebook have to sell off Instagram? Will it be able to argue that, due to the merger of its messaging functions, it can’t split up its apps (which some have suggested is a defensive tactic for this exact occurence)?
Expect a prolonged legal battle, with more questions than answers, which will carry on throughout 2021 and beyond.
New Screenshots Highlight How Snapchat’s Coming ‘Family Center’ Will Work
Snapchat’s parental control options look close to launch, with new screenshots based on back-end code showing how Snap’s coming ‘Family Center’ will look in the app.
As you can see in these images, shared by app intelligence company Watchful (via TechCrunch), the Family Center will enable parents to see who their child is engaging with in the app, along with who they’ve added, who they’re following, etc.
That could provide a new level of assurance for parents – though it could also be problematic for Snap, which has become a key resource for more private, intimate connection, with its anti-public posting ethos, and disappearing messages, helping to cement its place as an alternative to other social apps.
That’s really how Snap has embedded its niche. While other apps are about broadcasting your life to the wider world, Snap is about connecting with a small group of friends, where you can share your more private, secret thoughts, without concern of them living on forever, and coming back to bite you at a later stage.
That also, of course, means that more questionable, dangerous communications are happening in the app. Various reports have investigated how Snap is used for sending lewd messages, and arranging hook-ups, while drug dealers reportedly now use Snap to organize meet-ups and sales.
Which, of course, is why parents will be keen to get more insight into such, but I can’t imagine Snap users will be so welcoming of an intrusive tool in this respect.
But if parents know that it exists, they may have to, and that could be problematic for Snap. Teen users will need to accept their parents’ invitation to enable Family Center monitoring, but you can see how this could become an issue for many younger users in the app.
Still, the protective benefits may well be worth it, with random hook-ups and other engagements posing significant risks. And with kids as young as 13 able to create a Snapchat account, there are many vulnerable youngsters engaging in the app.
But it could reduce Snap’s appeal, as more parents become aware of the tool.
Snapchat hasn’t provided any further insight into the new Family Center, or when it will be released, but it looks close to launch based on these images.
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