The pros and cons of breaking up Facebook
The hammer comes down on the internet giant
The smartest insight and analysis, from all perspectives, rounded up from around the web:
Facebook's long campaign to keep conservatives happy didn't buy it protection from a potential breakup, said Jordan Weissmann at Slate. Last week, the Federal Trade Commission and 46 states "filed a massive pair of antitrust suits" accusing Facebook of buying rivals Instagram and WhatsApp to prevent them from competing. The twin cases are "a concerted, full-frontal assault on Mark Zuckerberg's empire," and it's what he deserves. For the past four years, Zuckerberg "bent over backward to avoid offending the Trump administration" while Facebook "kept the traffic flowing to the right-wing fever swamps." Despite the company's efforts to work the refs, Republicans have "continued to haul Zuckerberg" to Capitol Hill so they could gripe about "anti-conservative bias." Zuckerberg thought "playing nice" would spare him a serious regulatory crackdown. He was wrong.
Before you talk about breaking up Facebook, show some actual harm to consumers, said Jessica Melugin at the National Review. "Regardless of why Facebook decided to purchase Instagram and WhatsApp," it has used its size and technological "know-how" to vastly improve them. After buying WhatsApp for $19 billion in 2014, it "dropped download and subscription fees" to effectively zero. It also transformed Instagram — which had 13 employees when Facebook acquired it — from a "glitchy app" to one that has benefited 1 billion users. Outside of some unseemly emails, these suits are "far weaker than they seem," said Bloomberg.com in an editorial. "Reigning in Facebook is a matter for Congress, not antitrust enforcers." The FTC itself "scrutinized and approved both mergers," and no state objected at the time.
Yes, the FTC did approve the mergers, but it "explicitly reserved the right to take another look," said Tim Wu at The New York Times. There's precedent for taking action against a company after "the passage of time made things clearer." Standard Oil, Alcoa, and AT&T were all broken up "decades after their greatest offenses." Like John D. Rockefeller, Zuckerberg "scanned the marketplace, searching for competitors, and then bought or buried them." Regulators can also evolve, said Rana Foroohar at the Financial Times. They approved those deals based on a narrow, decades-old antitrust worldview focused on prices. Perhaps they "have finally started to understand digital markets as winner-takes-all landscapes" that may be free for the consumer but "do reduce consumer choice and innovation."
Instagram users and advertisers "who might prefer if Facebook had nothing to do with the app at all" could be the winners in a breakup, said Ashley Carman at The Verge. The photo-sharing app now accounts for "a quarter of Facebook's revenue, about $20 billion," and it's the "go-to app" for a younger audience. Facebook argues the Facebook and Instagram apps are so tightly integrated now that unwinding them is "unfeasible." But "peeling apart a conglomerate" isn't as hard as Facebook makes it sound. Advertisers appreciate that Instagram has "miraculously avoided most of the blowback" over misinformation and conspiracy theories that have dogged Facebook for years.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.