FTC Reportedly Considering an Injunction Against Facebook

The Federal Trade Commission is contemplating a preliminary injunction against Facebook over antitrust issues related to its integration of apps and whether they work with competitors. The injunction could prevent Facebook from further integrating apps, and possibly reverse past integration as a step to breaking up the company. An injunction would require a majority vote of the five-member FTC. Prominent antitrust experts have presented a plan to separate Facebook from recent acquisitions Instagram and WhatsApp.

The Wall Street Journal reports that “the social-media giant has worried for months that the FTC would seek an injunction against what are known as its ‘interoperability’ rules … [which] refers to the manner in which digital platforms interact.” If “Facebook’s interoperability policies curb other services’ ability to compete,” it could trigger an FTC injunction.

The FTC hasn’t hinted at what it might do, but if it does “move forward with an antitrust action against Facebook or seek an injunction over its interoperability policies” it could happen as early as January.

Facebook has previously stated that it “was considering closer interoperability of messaging across its main platforms … to increase interoperability … aimed at improving users’ experiences, particularly in light of recent controversies over privacy on Facebook, and not to freeze out competitors or fend off regulatory action.”

“There are privacy and security advantages to interoperability,” said Facebook chief executive Mark Zuckerberg in March. “With the ability to message across our services … you’d be able to send an encrypted message to someone’s phone number in WhatsApp from Messenger.”

Columbia University law professor Tim Wu, a former FTC senior adviser, said a preliminary injunction “gets things moving, and sort of forces things to a judicial decision very quickly.” Wu, and New York University law professor Scott Hemphill are pushing a preliminary injunction, which “could allow the FTC to take enforcement action ahead of the Justice Department.” S&P Global reported, “Facebook has acquired about 90 companies over the last 15 years.”

The New York Times reports that antitrust academics “have argued that the company made ‘serial defensive acquisitions’ to protect its edge in the market for social networks.” The FTC, which “rarely consider[s] unwinding mergers that have already closed,” would “also face a high bar in court to show that Facebook was about to violate antitrust laws or already had,” said a source.

The FTC discussed an injunction when Zuckerberg “disclosed he was working to unify the technical systems of WhatsApp, Instagram and Facebook Messenger … [which] would allow Facebook’s more than 2.7 billion users to communicate across the platforms.” Although Zuckerberg claimed it would improve privacy and security, “regulators and lawmakers have been concerned that the moves may make it more difficult to disentangle the apps in the future.”

FTC chair Joseph Simons “has recently said [the agency] is open to breaking up big tech companies but … has publicly said Facebook’s plan to integrate its apps would pose challenges if regulators wanted to split up the social network.”