2020 has been a strange year so far. Besides the obvious, we’ve witnessed two of the biggest tech giants facing scrutiny for their monopolistic business strategies.
After Google in October 2020, Facebook is now facing the heat in unarguably the biggest antitrust lawsuit of the decade.
Only last week, the US Federal Trade Commission along with 46 other states filed antitrust lawsuits against the social media giant in a bid to break up Facebook’s and revert the current status quo of Silicon Valley.
From a distance, FTC’s case despite being very strong seems like a losing battle. Especially since the charges made against Facebook are for acquisitions from a distant past.
Given that Facebook is the most powerful social network giant today, it’ll take a miracle to dissolve the company. Besides their CEO Mark Zuckerberg isn’t a next-door guy who’s known to throw in the towel easily.
While we may or may not know how this lawsuit pans out, one thing is for sure: Facebook will face serious repercussions.
In fact, it won’t be an overstretch to say that FTC’s case would hurt Facebook’s advertising business and put them at risk of losing their brand integrity unless they change.
Acquisitions of Instagram and WhatsApp Made The Case Against Facebook Much Stronger
For starters, Facebook’s two-billion-dollar acquisitions, namely the 2012 Instagram acquisition and the WhatsApp acquisition from 2014 have formed the cusp of the current antitrust lawsuit — as the FTC has called for the unwinding of both the acquisitions.
Facebook was quick to respond to the lawsuit in their blog post by citing that the company provides free access to their products and services while also showing their anguish over unearthing a settled case from the past. Yet, the counterpart lacks the bigger picture.
For one, the case is about Facebook’s unprecedented market share. Unlike Amazon which has a Walmart or an Apple which has a Google’s Android or Google Search Engine that’s fighting Bing, DuckDuckGo, Facebook doesn’t have a single competitor in its space. The social media giant has become too dominant.
Each of the apps, Facebook, Instagram, and WhatsApp are clearly separate products and have established their own monopolies. This makes the case for breaking up Facebook stronger than any other lawsuit in recent times.
Besides, FTC has been smart to collect tons of internal communications amongst the Facebook employees which clearly showcases Mark Zuckerberg’s singular vision to “copy, buy or kill” their potential competitors.
Worse, the recent acquisition of Giphy to act as a potential keyword watchdog only showcases Facebook’s relentless pursuit to keep its monopoly intact.
Facebook Is Running Out Of Allies And Would Be Forced To End Its Monopoly
There was a time in the pre-2000 era when Apple was on the verge of bankruptcy and Bill Gates bailed them out. Though Microsoft had its own perks in the deal as it was facing music in a bunch of antitrust lawsuits back then.
Today, Facebook finds itself in a similar situation albeit with no one to stand by them. And to be fair, they’ve only got themselves to blame for it.
The social media giant had already thwarted its competitors in the virtual reality space by acquiring Oculus. To add more fuel to their misery, Facebook is already fighting another lawsuit for tying their social logins with their VR headsets.
Moreover, the tech giant is always at loggerheads with Apple due to the former’s shady stance and efforts with data privacy which the latter is cracking down upon. This year alone iOS 14 has introduced a new app tracking transparency framework that’s causing worries to Facebook’s whole ad revenue business.
In all, the social media giant is a lone old wolf running out of options and the latest scrutiny only puts them at the risk of alienating their own customers.
Instagram for instance has been suffering from an identity crisis recently. The once media sharing application is slowly becoming a bloated mess today due to integrations with Messenger and the new TikTok clone, Reels.
It’ll be in Facebook’s best interests to divest Instagram and let it operate as a separate entity in order to preserve the brand’s integrity.
The antitrust lawsuit was launched to stop Facebook’s efforts to stifle competitors and small businesses.
Regardless of what the future beholds, the case has certainly put the limelight on Facebook’s coy business strategies, abuse of power, and negligence in using user’s data transparently.
If not anything the antitrust case could certainly awaken the consciousness of billions of customers using Facebook’s “free” services.
Once people realize the harm due to privacy breaches and how Facebook is crushing competitors using their data, it’ll ultimately force the tech giant to let go of their anti-competitive practices and tone down their excessive use of power for monopoly.
Things might take time, but we’ll definitely see a change.