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Facebook plans to tie itself together as regulators debate tearing it apart

Facebook plans to tie itself together as regulators debate tearing it apart


‘Mark Zuckerberg is taunting antitrust authorities around the world’

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In a lengthy blog post yesterday, Facebook CEO Mark Zuckerberg said that he wants Facebook to focus on encryption and privacy by combining its messaging products, but lawmakers and economists are worried that Zuckerberg may be attempting to outflank regulatory action.

“Mark Zuckerberg is taunting antitrust authorities around the world, breaking past acquisition commitments and threatening to consolidate market control,” Sen. Richard Blumenthal (D-CT) said in a statement to The Verge. “The FTC and Department of Justice should see through this façade. Big Tech will never change its invasive and anticompetitive ways until change is forced on them.”

“Yesterday, I suggested that our antitrust enforcers should consider unwinding anticompetitive mergers, including Facebook and Instagram,” Blumenthal continued.

“We cannot allow platform integration to become privacy disintegration.”

Those regulatory concerns first surfaced in January after The New York Times reported that Zuckerberg was planning to integrate Facebook Messenger, Instagram, and WhatsApp. “When it comes to privacy, we can no longer give Facebook the benefit of the doubt,” Sen. Ed Markey (D-MA) said at the time. “Now that Facebook plans to integrate its messaging services, we need more than mere assurances from the company that this move will not come at the expense of users’ data privacy and security. We cannot allow platform integration to become privacy disintegration.”

On January 24th, only a few days before the Times’ report, groups like the Open Market Institute, Color of Change, and the Electronic Privacy Information Center penned a letter to Federal Trade Commission chairman Joe Simons, asking him to consider making significant structural changes to Facebook. In the letter, they argue that a multimillion-dollar fine would not be enough to convince Facebook to make sweeping changes to its business model; only being forced to divest Instagram and WhatsApp would be enough for the company to make the serious structural changes necessary.

It was reported last month that the FTC was discussing levying a record-setting, multibillion-dollar fine on Facebook for violating the consent decree. It’s unclear whether that action could include a breakup.

Last week, the FTC announced that it would be building out a task force faced with understanding and enforcing competition regulation on big tech companies like Facebook and Google. At the time of the task force’s announcement, officials said that they would be actively looking into previous consummated mergers.

At the same time, European regulators are increasingly unhappy with Facebook’s status quo. Last month, the European Parliament released its final report on its investigation post-Cambridge Analytica. In it, lawmakers do not explicitly say that a break up is necessary, but that it may be worth thinking about. “The legislative tools already exist,” the report said. “They must now be applied to digital activity, using tools such as privacy laws, data protection legislation, antitrust and competition law.”

In the EU, antitrust law looks dramatically different than it does in the US. European countries exhibit a competition model rather than a consumer harm model like in the US. The EU report also points to Facebook shutting down API access to apps like Twitter’s former Vine product as a way to draw away competition from Instagram’s new video product.

The report even cites Facebook’s plan to integrate messaging services as a threat to competition. “The scale of this data sharing risks being massively increased, given the news that, by early 2020, Facebook is planning to integrate the technical infrastructure of Messenger, Instagram and WhatsApp, which, between them, have more than 2.6 billion users.”

In the US Congress, the committees overseeing the Justice Department and antitrust generally have begun discussions about what a break-up might look like.

On Monday, the Senate Judiciary Committee held a hearing entitled “Does America Have a Monopoly Problem?” Tech behemoths took center stage for lawmakers on both sides of the aisle. “Is there really any wonder that there is increased pressure for antitrust enforcement activity, for privacy activity when these companies behave in the way that they do?” Sen. Josh Hawley (R-MO) said at the hearing. “Every day brings some creepy new revelation about these companies’ behaviors. Of course the public is going to want there to be action to defend their rights. It’s only natural.”

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