Chairman of the Federal Trade Commission Joseph Simmons has commented that following Facebook’s integration with WhatsApp and Instagram, he believes it would now be harder to split up the market leader, following an investigation into the company’s handling of information and antitrust.
Speaking to The Financial Times, Simmons stated that the investigation could be muddled as Mark Zuckerburg, Facebook’s CEO, integrates with WhatsApp and Instagram.
“If they’re maintaining separate business structures and infrastructure, it’s much easier to have a divestiture in that circumstance than in where they’re completely enmeshed and all the eggs are scrambled.” Simons told the FT.
Facebook disclosed an investigation by the FTC into antitrust at the end of last month, after agreeing to pay $5bn as part of a fine, to adopt new oversight practises.
Simmons added that he intends to complete the investigation into Facebook before the 2020 election, following speculation that Facebook had partnered with Russian intelligence to sway the 2016 election in favour of President Trump that was investigated in the Mueller Report, and explored in Cambridge Analytica.
“We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you”, Zuckerberg said in a Facebook post discussing the breach of trust with users.
The FTC began its investigation in February 2019, as an effort to review previous transactions in the technology sector, though Simmons declined to discuss the specificities as to what the FTC is investigating within Facebook.
However, the agency has previously reviewed past mergers, pointing to the Instagram purchase for example, to examine as to “whether they were going to succeed so much as a photo service, but whether they were going to develop into something that could actually change the Facebook platform.”
The FTC previously cleared both the WhatsApp and Instagram acquisitions by Facebook. Simmons did acknowledge the complexity for the court to reverse a merger it had once agreed on.
“It’s not easy,” he said. “On the other hand, you might have a situation where you have additional evidence that the company was engaged in a programme to basically snuff out its competitors through a process of acquisition.”
The monopolisation of the industry is to be examined by the FTC chairman, into whether Instagram succeeded due to Facebook’s purchase, or as to whether the company would succeed naturally.
“Maybe we missed something when we reviewed the transaction and there was evidence that was available that we just didn’t get or didn’t see or didn’t appreciate,” Simmons clarified.
“And then the other thing is maybe historically you can show that it was, like I said before, part of a systematic effort to eliminate your competition.”
Facebook has previously invested in e-commerce platform Meesho, as well as purchasing gaming virtual reality company Oculus in 2014.