Social media giant Facebook is facing increased scrutiny from American regulators over its plan to integrate its subsidiaries.
The US Federal Trade Commission (FTC) is reportedly considering requesting a court to stop Facebook Inc from integrating its WhatsApp, Instagram and Messenger subsidiaries under one banner.
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Facebook chief Executive Mark Zuckerberg announced in March his desire to integrate the three services in order to allow users to communicate with each other more easily.
However, the FTC’s antitrust concerns could hamper any such developments. The US federal government’s main business regulator is said to be concerned with Facebook’s dominance of social media and the online advertising market. The reports of such disquiet first emerged in the Wall Street Journal, which stated that the FTC could file for an injunction to halt the integration by next month.
Although the number of regular Facebook users has declined in recent years, the company has been able to maintain its position by assiduous acquisitions. In 2012 it bought the photo-sharing network Instagram for $1bn (£750m, €900m), then in 2014 it acquired the messaging service WhatsApp for $22bn (£16.5bn, €19.7bn).
Instagram advertisements now account for a significant portion of Facebook’s revenue growth, while WhatsApp has grown its user base to 1.5 billion people. Although Zuckerberg has emphasised his desire to make messaging easier, integration will enable advertisers to use one centralised system to place ads across the three services.
Facebook’s share price plunged as much as 4 per cent on Thursday, December 12 in the afternoon (US time) following the news of increased regulatory interest, but is recovering in pre-market trading.
With its business ethos of ‘move fast and break things’, this is not the first, and will likely not be the last time Facebook comes under such scrutiny. Indeed, regulators have sought to defang the FAANGs in recent years.
Both the US Justice Department and House of Representatives Judiciary Committee are investigating Facebook, Apple, Amazon and Google for antitrust violations.
According to US Attorney General William Barr, concerns over anti-competitive behaviour will be “front and center” in the upcoming Justice Department investigation into ‘big-tech’.