For a long time, big tech companies have been the target of lawmakers and regulators on Capitol Hill due to a possible antitrust rhetoric. This week, the first step was taken by the Federal Trade Commission (FTC) in what could turn out to be a possible dismantling of a major tech company, as it filed an antitrust lawsuit against Facebook. The FTC made the filings on Wednesday and according to the allegations, the social media giant has engaged in anti-competitive and predatory tactics consistently for the past decade. The agency said that Facebook had a rather long history of either copying features from different platforms or directly purchasing them.
The FTC believes that this could end up jeopardizing its market share. The FTC’s case will mostly depend on some of the high-profile purchases that have been made by Facebook. In 2012, Facebook had bought the video-sharing app Instagram for $1 billion, just as it was heading towards take off. In 2014, the Silicon Valley giant also purchased popular mobile messaging application WhatsApp in a deal that was reported to be around $19 billion. These purchases, along with some others, have helped Facebook in establishing a substantial market share in the internet space. The BBC reported last December that Facebook owns the four most downloaded apps in the last decade.
The FTC also obtained internal documents, which showed that Instagram had been recognized by Facebook’s executives as a potential threat to their dominance before they acquired it. With the rising popularity of smartphones and the shift to video sharing by consumers, Instagram could have usurped Facebook, which prompted the social media firm to make an offer. The WhatsApp case had a similar trend and the FTC said that the app was bought to prevent it from mounting the company’s social media platform. Thanks to WhatsApp’s easier operation, it had been putting a great deal of pressure on Facebook’s Messenger.
Hence, WhatsApp could have launched a social media platform that would have threatened Facebook. Likewise, Facebook had also tried to buy off competitors like Twitter and Snapchat. Regardless, this is not the first time that antitrust accusations have been made against Facebook. The chief executive of the company, Mark Zuckerberg had to appear before Congress, along with leaders of other tech companies like Amazon, Apple and Google, in July. While all of these companies have been accused of similar behavior in the past, things are worse for Facebook.
The social media firm launched a stablecoin project called Libra last June. Even though it was supposed to be launched in June this year, the project was restricted by regulators at home and abroad due to several parameters, including the company’s record. Libra has now been rebranded by Facebook to ‘Diem’ and several changes have been made. The company is hoping to launch the asset in 2021 as a stablecoin pegged to the US dollar. However, there are some foreign regulators who claim not to be impressed with the changes they have seen so far and this new case will certainly not help Facebook.