The report stated that Facebook sustains its monopoly position by identifying and acquiring its competitors.
The U.S. Judiciary antitrust committee said in a report that Facebook Inc (NASDAQ: FB) and other 3 tech giants enjoy monopoly powers. The report highlighted certain recommendations, specifying that Facebook watches out for competitors to kill them.
According to the report, Facebook holds monopoly power over the social network space. The report said that Facebook has managed to remain in its monopoly space by acquiring, copying, or killing its competitors.
As stated in the report, Facebook sustains its monopoly position by identifying and acquiring its competitors. The committee added that the California-based social media service provider also copies or kills any company that poses a threat.
Speaking to CNBC, a Facebook spokesman told CNBC that the social media company is an “American success story.” In response to the committee’s report, the spokesman added:
“Acquisitions are part of every industry, and just one way we innovate new technologies to deliver more value to people. Instagram and Whatsapp have reached new heights of success because Facebook has invested billions into those businesses.”
The report also revealed that Facebook now strongly competes more among its own products than actual competitors. This was triggered by recent documents produced during the 16-month investigation. Specifically, the report highlighted internal competitions among Facebook, Instagram, Whatsapp, and Messenger.
Notably, the report referred to an internal communication among Facebook CEO Mark Zuckerberg and other senior executives of the company. Zuckerberg said the company “can likely always buy any competitive start-ups” before concluding that Instagram was a threat during the exchange of messages.
Facebook Explores Data Advantage
Furthermore, the report showed that Facebook is also maintaining its monopoly with its large database. With over 3 billion monthly users, Facebook uses its massive data to attract more users to spend more time on its services.
The report cited:
“Facebook’s data advantage is thus compounded over time, cementing Facebook’s market position and making it even more difficult for new platforms to provide a competitive user experience.”
The committee noted in the report that Facebook’s lack of competitors has led to worse privacy protections for its users. In addition, the level of misinformation on the Facebook platform has increased.
Apart from Facebook, the subcommittee also addressed antitrust issues concerning three other tech giants. They include Amazon.com Inc (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), and Alphabet Inc (NASDAQ: GOOGL).
Broadly, the committee’s report recommended a “structural separation” among companies. With no specificity in the report, this suggests that Facebook will need to separate from the products it acquired over the years. Facebook acquired Instagram in 2012 and Whatsapp in 2014.
In response to the antitrust committee’s findings, Apple said the company disagrees with the team’s conclusions. Apple added that it would soon issue a more detailed response.
Facebook is currently trading at $256.77, a 0.72% loss over its previous close of $258.66. The company has climbed 42.86% over the past year and over 25% in 2020. In addition to recent increases, FB added 5.48% in the past three months. However, the California-based tech giant lost nearly 6% in the past month and 1.68% over the last five days.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.