Facebook is reportedly planning to combine Instagram, Messenger and WhatsApp into a single digital package. Not so fast, says the US government. As NBC News reports, the Federal Trade Commission (FTC) has been investigating Facebook for a while to determine whether it is in violation of antitrust laws, which are designed to prevent corporations from monopolizing markets and crushing competition. Here is a clip from NBC’s report:
“The FTC could seek a preliminary injunction to stop Facebook from weaving its disparate parts together. An injunction could deal a severe blow to Facebook and its efforts to combine its services, which began earlier this year. It would also leave the company more vulnerable to being broken up.”
Such an injunction would require a majority vote from the five-member FTC, which could reportedly happen as soon as January.
Here is more from NBC:
“Pursuing an injunction would be an extraordinary step for the FTC, which does not typically try to undo mergers that have already happened. Facebook bought Instagram in 2012 and WhatsApp in 2014. The five-member commission would need to vote to pursue the injunction and then file suit in federal court. The FTC would also need to prove that Facebook was in violation of antitrust law.”
News of the FTC’s potential action was first reported in the Wall Street Journal; Facebook shares dropped 3 percent as a result.
The WSJ story quotes some hot air discharged from Facebook CEO Mark Zuckerberg in March, whereby he stated:
“There are privacy and security advantages to interoperability. With the ability to message across our services…you’d be able to send an encrypted message to someone’s phone number in WhatsApp from Messenger.”
Translation: this is good for our bottom line.
The WSJ also quoted Columbia University law professor Tim Wu, a former senior adviser for the FTC, as saying:
“The advantages are that it gets things moving, and sort of forces things to a judicial decision very quickly, as opposed to having an antitrust investigation going for five years….The burdens of proof can be higher for the government, but if they’ve got a good case it can be advantageous.”