FTC Chair Open to Option of Breaking Up Major Tech Firms

Federal Trade Commission chair Joe Simons stated that, in the face of anti-competitive and antitrust behavior, he would be willing to break up the big tech companies, although, “it’s not ideal because it’s messy.” He’s head of a task force to examine these behemoths, including a close look at whether Facebook acquired startups, such as Instagram in 2012 and WhatsApp in 2014, to stifle competition. The FTC approved both purchases. The FTC is working in parallel with the Justice Department’s antitrust unit.

Bloomberg reports that “critics including Facebook co-founder Chris Hughes have called for antitrust enforcers to unwind those deals,” which Simons said is possible to do, “even though they previously won approval.” Court approval would be required for such a breakup.

Facebook chief executive Mark Zuckerberg “has said he welcomes regulation, but that breaking up the company wouldn’t address legislators’ privacy and data concerns … [and] that its size actually enables it to do the things that regulators want to see, such as better policing of content.”

The FTC and Justice Department’s antitrust division agreed to “divide scrutiny of the tech industry … based on specific conduct, not on the companies themselves.” Simons noted that both entities might investigate “the same company at the same time but just for different conduct.”

Former FTC commissioner William Kovacic, now at George Washington University’s law school, said it was “nuts” to split the investigation of a single company between agencies. “It is bizarre to take these enormously complicated institutions and enterprises and have two separate teams of analysts looking at the same enterprise,” he said. “It will be a source of real frustration and confusion for the companies if that’s how they’re dividing things unless there’s cooperation.”

Bipartisan concern for the behavior of these companies includes Presidential candidate/Democratic senator Elizabeth Warren, who Bloomberg dubs “among the most outspoken about targeting Facebook, Alphabet’s Google and Amazon.” Simons has not confirmed information about the Facebook probe “beyond what the company disclosed in July, when it said that the FTC had initiated a broad probe into several business lines — social media, digital advertising and mobile applications.”

“There’s a question about what caused Instagram to be as successful as it is,” he said. “Was it the fact that the seed was already there and it was going to be germinated no matter what or was the seed germinated because Facebook acquired it?”