FTC Sues to Break-Up Facebook, Sell Assets
On Wednesday, December 9th, 2020, the United States Federal Trade Commission filed a lawsuit against Facebook, Inc. to break up and sell-off its assets such as Instagram and WhatsApp back to their original status as independent businesses. The lawsuit asks the United States Federal Court in Washington, D.C. to order a “divestiture of assets, divestiture or reconstruction of businesses (including, but not limited to, Instagram and/or WhatsApp)” with possibilities of additional relief to be added by the court itself into the case.
While social media companies and digital marketing platforms have been growing over the past 10 years at an exponential rate with minimal governmental oversight, it has been becoming increasingly apparent that these companies are taking control and power over regular routines and daily lifestyles more than they should be, with insight into people’s personal lives at a dangerous level (RE: specific advertisements appearing on social media and websites on the currently being used devices within seconds of a verbal or textual conversation taking place). These companies have been gathering, storing and selling the personal data of billions of social media users over the past decade, creating and strengthening a database that is dangerous and life threatening in the wrong hands.
This lack of security is where the original concerns against Facebook and co-founder/current owner/CEO of the company Mark Zuckerberg have been rising over the past several years. In fact, not only is the FTC Lawsuit just one amongst multiple cases in the pipeline against Facebook, co-founder Chris Hughes even appeared in an interview opposite NBC News Channel’s Kate Snow, discussing his regret over selling his shares of the company and unwillingly letting Zuck run wild with his ideas for the social media company. In the exclusive interview that you can watch below, he even goes so far as to ask the government to step in and break up Facebook. This was over a year ago in May 2019! Regardless of whether this is considered a delayed response or a quick one, the government heard and now their FTC department is reacting with this lawsuit. Additionally, Hughes wrote an article for the New York Times that discussed his opinions and asked to ‘…Break Up Facebook’.
The lack of scrutiny into the technology mammoth (it has gone way beyond the ‘tech giant’ status by now) has now shifted into a massive amount of attention being given to Facebook and their operations. According to the commission, “Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire.”
Alongside the FTC, 48 states/territories and their attorney generals are filing a separate lawsuit against the same tech giant, bringing up their concerns against Facebook’s current power and control over the internet. With two major lawsuits up against Facebook as well as co-founder Hughes’ interviews and articles backing them and their efforts up, the company lost its share price by 4% as of yesterday, but since then, it has managed to begin going back up even if it isn’t at the same rate at which it was standing before the news broke. While Zuckerberg is confident since over a year ago he would win were the government to bring a lawsuit against his company, it wouldn’t be the first time that a company would be successfully broke up by the government (RE: AT&T, 1986).
In the past, Facebook has been able to pay off the FTC’s investigations and other class action lawsuits, but knowing President-Elect Biden’s disregard for Facebook, it is unlikely that the company will be able to win a reprieve on the cases.
Stay tuned with Media Quotient Inc. for updates on the Breakup Facebook news!
Credit: US District Court Website
