Nithin Basavaraj
Facebook is a social networking platform launched in February 4, 2004. As of the year 2020 more than 3 billion people use Facebook and Facebook owned services and is valued at nearly 800 billion Dollars and profited more than 15 billion dollars in the year 2019. Facebook is now under the radar of the govt over misconduct of antitrust policy.
This is not the first time Facebook is under scrutiny. Other big Tech giants like Apple, Google Amazon and Facebook took a brutal political lashing on July 2020 as the Democrats and Republicans of the United States of America confronted the CEO’s for pushing their market power to crush the competitors in the market space. This hearing took place for over six hours and the result of the hearing was that it showed that the tech sector had become too big and powerful, threatening rivals to competitors and to consumers and, in some cases, even democracy itself.
Amazon, meanwhile, faced scrutiny over allegations that it may have misled the consumer’s and its competitors. The e-commerce giant previously told lawmakers that it does not tap data from third-party sellers to boost sales of its own products. But Democratic representative in the hearing brought up the public reports that indicated Amazon did do so by pushing sales of its amazon basics products instead of other competitor’s products. And there was evidence that amazon did not acknowledge small book writers to promote their book sales through amazon and they only promoted giant book writers and vendors.
Example: Amazon manufactures its own cables (Lightening, Micro USB, Type C), its own battery cell for remotes, keyboard and mouses and they do push these in their website as a price reduction program and on the home page boarder content leaving out competitors to look for some revenue for amazon.
Apple being an iconic famous consumer electronics brand and a luxury brand was under scrutiny as a study by Analysis group showed that the 30 percent commission it charges many apps for the right to appear on iPhones, iPad and MacBook is close to what other platforms charge for distribution. The study left out that Apple helped popularize that 30 percent standard across the industry. The study also reviewed that Apple used to ignore app approval requests from other developers messaging sharing platforms (Other than Facebook owned apps) to promote their own famous messaging platform called the iMessage.
Example: Apple charge 30 percent commission to other app developers upon approval but charges less than 30 percentage for amazon owned entertainment streaming service called Amazon Prime Video.
Google was also under scrutiny for dominating search engines and SEO. Google is also the default web browser, mail and maps on any consumer electronic products be it Apple, Google Pixel, Google Chromebook, Samsung and other Chinese owned brands of smartphones except Huawei which is out of the googles contract for violating terms and condition to breaching of data of its consumers.
Example: Google dominated search engines and never gave a chance to other search engines like bingo and duck duck go. This domination has made people addicted and to prefer google services and that it would be scary to imagine a world without these services.
Facebook was in heavy scrutiny as it has also dominated social network platform by not giving anyone a fair competition in the market. It is undeniable that Facebook was the reason why Donald Trump won the election as Facebook pushed campaign of Donald trump based on the analysis of the consumer daily video watching behaviour and also political behaviour on Facebook.
This time December 2020, Facebook alone is once again under the scrutiny by a lawsuit filed on the company by FTC and the US Government for creating a monopoly environment and succeeded in doing so for nearly a decade. The reason for this is because Facebook nearly for a decade has been following ‘Buy or Bury’ approach to potential competitors in the market space.
Facebook (Mark Zuckerberg) decided that in order to have full control over the market the best way to eliminate any competition is to follow the buy approach.
In the year 2012 Instagram a social network had picked up a positive growth in the market. Seeing this, Facebook saw this a threat to them as Instagram would be the reason for Facebook to go bankrupt. To eliminate the competition from Instagram, Facebook decided to buy Instagram by offering a good deal of money i.e. 1 billion dollars to them and this resulted in a monopoly action as they never gave a chance to any rivals to threaten them openly in the business market.
In 2014, the company WhatsApp being a popular social messaging platform also decided to gain a substantial positive growth in the market. Facebook saw this as a threat to them and they decided to follow the same action or process they followed in 2012 by buying them too. Finally, in the same year 2014 Facebook also purchased WhatsApp for a good deal of money and eliminated any competition from them, which resulted in monopoly action. FTC (Federal Trade Commission) focuses on these two successful buying of the company which started a huge wave of monopoly for Facebook.
The legal filings cite internal messages from Facebook CEO Mark Zuckerberg, such as one 2008 email that said it was “better to buy than compete”.
It’s quite hard sometimes to comprehend just how massive Facebook is. Facebook, Facebook Messenger, WhatsApp and Instagram all owned by Facebook all have more than a billion monthly users. Facebook and WhatsApp alone have more than two billion users a day.
Federal Trade Commission (FTC) is arguing is that there’s a reason why Facebook came to dominate this highly lucrative sector because it acquired the competition illegally.
Both of those acquisitions were previously looked by the FTC and were approved.
Facebook’s argument that they bought these companies when they were much smaller and there was nothing to do about their success.
In other words, “don’t punish Facebook for building strong American companies” CEO of Facebook Mark Zuckerberg
Whether Instagram and WhatsApp will be broken off from Facebook will now be decided in the courts and these antitrust lawsuits will take more time.
Nithin Basavaraj, student of MBA, Greenwich University. UK
Daksha Legal 