Will Facebook be broken up in 2021?
Facebook is one of the most popular and biggest social media platform worldwide. With 2.8 billion monthly active users it keeps growing rapidly. We don’t use Facebook at the moment at MAUWEN but almost everyone has a personal profile. Facebook is a free social network and allows people to instantly send and receive messages. You can upload images and videos and stay in touch with friends. In 2012 Facebook acquired Instagram and two years later they acquired WhatsApp. The platform has spent years expanding its infrastructure with other social networks.
Critics of these acquisitions suggest they destroy any future competition. Facebook wants to dominate data with their social channels. The Federal Trade Commission (FTC) and the state attorneys general also supports this claim and filed an antitrust suit against Facebook.
The Crux of The Matter
Facebook is known for its acquisitions. Since its launch in 2004 the company has acquired over 75 firms including Instagram and WhatsApp. These are the latest and most controversial purchases. Combined these acquisitions cost $20bn. Since they were bought Facebook has been criticized and accused of wanting to have a data monopoly.
“Combined, the data from multiple platforms (FB, FB Messenger, IG, and WhatsApp – four of the most downloaded apps in the past decade) can lead to an extremely high level of precision in modeling our traits and behaviors. This amount of power should be regulated,” said Taha Yasseri, a senior research fellow in computation science at the Oxford Internet Institute.
In December 2020, the US government led by the Federal Trade Commission (FTC) and the attorneys general from 48 states filed a lawsuit against Facebook in the Federal District Court of the District of Columbia. The FTC whose primary duty is to protect “consumers by stopping unfair, deceptive or fraudulent practices in the marketplace,” accused the social media company of anticompetitive behavior and dominance within the social media platform and the digital marketplace.
“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive,” says Ian Conner, FTC Bureau of Competition Director.
To win this case the FTC and its team must convince the court that Facebook made its acquisitions not primarily to improve the products.
However these accusations are not easy to prove.
Will Facebook split in 2021?
According to legal experts the FTC has a strong case against the social media giant. But it is not certain if the court will favor the US government and when the breakup occurs.
Analysts at Bloomberg believe that the break up might not be the worst thing after all. They posit that while the company’s divestiture would be humiliating for CEO Mark Zuckerberg and strip him of power, it could be a value-creating event for shareholders similar to the split of EBay PayPal Holdings Inc.
Since Facebook acquired Instagram and WhatsApp it has been attacked from several fronts and currently has antitrust suits. The FTC has accused the company of illegal monopoly, anti-competitive behavior, and dominance. Thereby calling for the company’s divestiture and restructuring.