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FTC may be gearing up for Facebook antitrust lawsuit

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According to a Wall Street Journal report, the US Federal Trade Commission (FTC) is considering filing an antitrust lawsuit against Facebook by the end of the year.

Since June 2019, the FTC has been investigating allegations that Facebook has abused its dominance in the social media sphere, with a view to a possible lawsuit.

This is part of a broad effort by US regulators, departments, lawmakers, and attorneys-general to hold tech giants accountable for their aggressive market behaviour; the FTC is reportedly also investigating Amazon, while the Justice Department is investigating Apple and Google (and expected to roll out legal action against Google in the coming weeks).

Much of the investigation into Facebook is focused on its acquisitions of Instagram in 2012 and WhatsApp in 2014, which could have emerged as competitors in the social media space.

Defending Facebook’s behaviour during a historic congressional hearing in July, Zuckerberg argued that most people would not consider Instagram a competitor at the time of acquisition, and it was never guaranteed to grow to the size that it has under Facebook’s ownership and investment. Internal Facebook emails contradict his claims, however, showing that Zuckerberg had considered Instagram a threat. The hearing was part of an investigation by the House Committee on the Judiciary’s Antitrust Subcommittee, which is preparing recommendations for reining-in the allegedly anticompetitive power of Silicon Valley giants.

Facebook is now making its defence to the FTC, including by providing testimony from CEO and co-founder Mark Zuckerberg to the regulator for the first time last month.

Sources familiar with the matter told the Wall Street Journal that while the investigation is concluding, a final decision is yet to be made on whether to bring legal action against Facebook, which will be decided in a majority vote by the five FTC commissioners (three Republicans and two Democrats). The FTC has previously investigated tech giants at length and subsequently declined to take legal action.

If the FTC proceeds with the lawsuit, Facebook could face a hefty fine potentially reaching billions of dollars, as well as – more concerning for the company – strict new oversight rules. A “record-setting” $5bn FTC fine levied against Facebook last year for its privacy violations, following an investigation triggered by the Cambridge Analytica revelations. As part of the settlement, Facebook was also required to agree to mild new oversight, including quarterly privacy reviews.

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