The Federal Trade Commission’s (FTC's) ongoing antitrust investigations could lead to a lawsuit against Facebook as soon as the next few months. The Wall Street Journal reports that the FTC is getting ready to file such an antitrust lawsuit by the end of 2020, according to people familiar with the matter.
The FTC has steadily been building its case against Facebook — along with a handful of other tech giants — for more than a year now. In July, CEOs from Amazon, Apple, Facebook, and Google took to the stand (virtually, of course) to answer questions about the ongoing investigations.
Facebook shares fell 3 percent in after-hours trading yesterday after WSJ broke the news.
People familiar with the details of the FTC’s investigation say no final decisions have been made yet. We could very well be eating our words in the new year if the FTC doesn’t decide to go ahead with its case.WSJ points to the well-known 2013 Google case as an example: after a lengthy investigation, the FTC decided against filing an official complaint.
Devouring the competition — The FTC’s case against Facebook is simple: the company’s practices are explicitly anti-competitive. At July’s live-streamed hearing, founder Mark Zuckerberg was hit hard with intense questions about Facebook’s acquisitions of smaller companies, particularly in relation to its buyouts of WhatsApp and Instagram.
Internal emails and text messages came to light at the hearing, all of which made Facebook look unmistakably like a supervillain. In one such thread, Facebook execs stated explicitly that they would threaten to copy a smaller company’s ideas if that company didn’t acquiesce to a buyout. Zuckerberg, of course, denied that he had threatened Instagram despite the evidence to the contrary.
Moving fast — The FTC’s investigation is coming to a head much more quickly than experts expected. A July report by The New York Times figured the investigation wouldn’t be complete until at least the beginning of 2021.
Of course, the revised timeline we’re hearing about now is mostly conjecture, too. And even if the FTC does decide to charge Facebook, the resulting lawsuit would take years to play out. The upcoming election results will likely have some effect on the investigation’s proceedings, too.
Mark Zuckerberg also testified in late August at an FTC hearing, according to people familiar with the case; Politico reported at the time that this could potentially be a sign that the antitrust investigation was heading toward pursuing a lawsuit.
Based on what the public has been able to glimpse through the government’s shutters, things aren’t looking so hot for Facebook in this one. A lawsuit could force Facebook to finally change its cannibalistic ways. The FTC’s decision will ultimately set precedents and is likely to influence policy and lawmaking well beyond just this case. Whether it'll be able to unbundle the Facebook-WhatsApp-Instagram unholy trinity, though, is anybody's guess.