The FTC plus nearly every state in the union want Facebook to divest Instagram and WhatsApp
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The attorneys general of forty-six states, plus DC and Guam, have jointly filed an anti-trust lawsuit against Facebook over its acquisitions. Somewhat confusingly, the FTC is also filing a similar, but separate, suit.
During all the trials this summer, I found the anti-competitive angle a bit specious — I couldn’t see a resolution that would solve any actual problems, and the questions mostly seemed to point to solutions that were only going to make things worse (see: EU cookie compliance laws).
This feels like a right direction, if not the right call exactly. At best, it feels like the attorneys general are recognizing Facebook is a unique entity, and uniquely dangerous, which justifies a specifically focused remedy.
The thing is, though, Facebook has a Trumpian teflon veneer1 to it and I’m not certain a loss for them at the end of the inevitable, long legal wrangling actually ends up making them pay the price for any anti-competitive behavior.
Take Instagram — the tale we tell about that acquisition is Facebook needed them to stay relevant but the fact is, Instagram needed Facebook’s infrastructure, particularly on the ad side, just as badly. For all the praise heaped on the Instagram founders over the years, there’s no guarantee they would have actually made a business out of their trendy app.
If Facebook is forced to spin them off as a separate company, the app still needs that infrastructure. To make it work, both technically and legally, Facebook could open up their infrastructure and resell it to Instagram as a customer — maybe that becomes a line of business for them or maybe it’s solely for one company, it doesn’t really matter. Nothing much changes other than a few thousand engineers have to spend two years building it all out.
And in the end, none of that does anything to address the structural problem of Facebook: they refuse to take responsibility for all the information pollution they spew into the environment.
The time to break this up was before it happened in the first place.
When some of the biggest brand advertisers in the world staged a Facebook boycott earlier this year, it hardly made a dent in the company’s profits. ↩︎