New US action threatens Facebook

New US action threatens Facebook
New US action threatens Facebook

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Aden - Yasmine El Tohamy - The US Federal Trade Commission is considering seeking a preliminary injunction against Facebook over concerns that how its apps interact could violate antitrust law, the Wall Street Journal reported, citing people familiar with the matter.

Facebook shares closed 2.7 per cent lower, reflecting fears the potential regulatory move could be a first step toward forcing the company to sell apps WhatsApp and Instagram, its fast-growing acquisitions.

If the FTC proceeds, it would likely ask a court to bar Facebook from enforcing policies regarding how the world's largest social network's apps work with each other and potential rivals, the newspaper reported.

The FTC may also ask a court to forbid Facebook from moving ahead with plans to more fully integrate subsidiaries that it has purchased, the newspaper said.

Apart from antitrust concerns, Facebook and other tech giants are facing criticism over privacy lapses, how they handle vast quantities of consumer data, and accusations of bias in the polarised US political environment. The Wall Street Journal said the FTC could file for the injunction as early as next month. Facebook and the FTC declined to comment.

Chief executive Mark Zuckerberg announced plans in March to integrate Facebook's messaging services as part of a proposed shift toward more private forms of social networking.
Under the proposal, users of Facebook units Messenger, WhatsApp and the direct messaging system within Instagram will be able to communicate with each other, and end-to-end encryption will be extended across the three services.

Zuckerberg's strategy reflects the importance of Instagram and WhatsApp as Facebook's flagship app struggles to attract new young users in the company's most lucrative markets.
Instagram ads drive much of Facebook's revenue growth, while the company is slowly moving toward making money from WhatsApp, which has surged to a user base of 1.5 billion people since its $22 billion acquisition in 2014.

The properties are already integrated to some degree, with users able to link their accounts and advertisers able to use one system to place ads across different platforms.
Encrypting messaging systems will restrict Facebook's ability to see the content of users' messages, but the company has not divulged whether the integration plan may deepen other types of data sharing between the units.

Facebook, Alphabet's Google, Amazon.com and Apple all face antitrust investigations by the Justice Department and House of Representatives Judiciary Committee.
The FTC was also known to be investigating Facebook while groups of state attorneys general are looking at Facebook and Google.

US Attorney General William Barr said on Tuesday he hoped to have Justice Department investigations of the big tech platforms completed next year.

Barr said the Justice Department review was not limited to antitrust, but that looking for anti-competitive behavior was "front and centre".

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