The Federal Trade Commission is currently conducting an antitrust investigation into Facebook’s monopolistic practices and violations of antitrust law, a probe that will soon be led by the Department of Justice.
The federal government’s investigations will do nothing to stop Facebook’s relentless anti-competitive conduct in the foreseeable future, warns Snapchat’s CEO and co-founder Evan Spiegel.
“I mean the history of antitrust would basically say that these investigations last like seven to 10 years or something like that and that basically nothing happens,” Spiegel said onstage at TechCrunch Disrupt SF. “I think a lot can change in the seven to 10 years that this process will take.”
In a brazen attempt to quash competition, Facebook Inc. has been mimicking all of Snapchat’s innovative features on its platform for years.
According to the Wall Street Journal, Zuckerberg has also threatened Spiegel with an ultimatum, demanding he sell Snapchat to Facebook or endure Facebook identically emulating all of Snapchat’s features.
Snap has been chronicling every anti-competitive tactic employed by Facebook and documenting the evidence in a file dubbed “Project Voldemort.”
While Spiegel admitted he has no faith the government will regulate Facebook’s conglomerating power and overreach, the public upheaval over the company’s monopolistic behavior is pressuring the social media network to correct some of its egregious anti-competitive tactics, he argued.
“The thing that everyone’s concerned about is that they’ve seen that competition has been what has motivated Facebook to make those changes over time,” Spiegel said onstage. “So, if you look at Snapchat, the inventions that we create around ephemerality, around privacy, those have really motivated Facebook to dramatically change their product offering in order to compete.”
Snap has documented every move Facebook has taken to eliminate Snap as a competitor, a Snap insider told the WSJ last month.
Evan did not detail the evidence his company has collected proving Facebook is intentionally suppresses Snap content.
“It’s hard to say and you know I’d probably be stupid to talk about it here,” he said.
However, he confirmed Snap has documented all of Facebook’s attempts to clamp down Snapchat in its Project Voldemort list, which they started compiling several years ago.
“I think what everyone is concerned about is what they would characterize as anti-competitive practices, so, for example, you know, people upload snaps they create on Snapchat to Instagram, all the time, and then Instagram suppresses you know the Snapchat hashtag or they suppress people’s ability to post snap codes as their profile picture or suppress their ability to link to Snapchat on their profile. And that’s an example of anti-competitive behavior.”
“I didn’t make it, our legal team put it together,” Spiegel said. “I think just because they kept hearing from our partners all of these things that Facebook was doing and it was actually so many that people couldn’t actually remember them all so they started writing them down.”
The FTC is currently conducting interviews with Facebook’s rival Snap over alleged anti-competition practices and Snap is happily and readily complying.
In June, the FTC and DOJ, which both share antitrust enforcement power and oversee clearance agreements, negotiated a deal to divide oversight of the nation’s largest tech firms. The Justice Department began an antitrust investigation into Alphabet Inc.’s Google and Apple Inc., while the FTC obtained jurisdiction over Facebook and Amazon.
However, Attorney General William Barr reversed the decision, requesting the DOJ lead the investigation into Facebook, according to the source familiar with the matter told Reuters.
FTC Chairman Joe Simmons has contested the DOJ’s decision to intervene with its investigation of the company, arguing the Justice Department is contravening with the commission’s territory. Simmons wrote a letter to the DOJ earlier this month demanding the department stick to it’s designated lane and complained about “the department’s behavior and [raised] concerns about recent interactions between the two agencies.”
In a recent congressional hearing, Makan Delrahim, the Justice Department’s antitrust chief, revealed the two federal agencies have been at odds over jurisdiction to investigate Facebook.
“I cannot deny there are instances where Chairman Simons’ and my time is wasted on those types of squabbles,” Delrahim said.
Another source familiar with the matter claims Attorney General William Barr decided it was imperative the Justice Department conduct an examination of Facebook’s breach of antitrust law amid universal concern regarding the tech company’s unregulated anti-competitive practices.
Earlier this month, virtually every state attorney general charged Facebook and Google with antitrust violations and announced plans to investigate the tech giants for using its conglomerate power to eliminate their competitors and stifle users. Fifty attorneys general from U.S. states and territories signed onto an antitrust lawsuit, while only Alabama and California opted-out of the investigation.
The House Judiciary Committee has also launched a bipartisan probe into whether Facebook, Google, Apple, and Amazon are breaching antitrust law, requesting the digital market giants turnover internal documents and communications that deliberately eliminated its competitors during the time frame they rapidly expanded.
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