Whatâs Going On Here?Facebookâs relationship with the US got a lot more complicated on Wednesday, after the country filed lawsuits pushing the social network to break up once and for all. What Does This Mean?In two separate lawsuits, the antitrust regulator and almost every US state alleged that Facebook has a monopoly in the social networking market. Theyâre claiming the company has either bought or tried to buy smaller firms in a bid to snuff out potential competitors before they get a chance to live up to that potential. More specifically, theyâre targeting two of Facebookâs major acquisitions â Instagram and WhatsApp â in hopes they can force the company to unwind them altogether.
Facebook, for its part, invoked the long-established âno takey-backsiesâ principle: the company pointed out that both acquisitions were investigated and approved in 2012 and 2014 respectively by the very same regulators suing them, and that this whole thing is just an unnecessary excuse for a do-over. Why Should I Care?For markets: Firing blanks.
Investigations and lawsuits into Big Techâs dominance are launching left, right, and center these days, but this lawsuit makes Facebook the first of the bunch to be hit with a breakup order. Investors might want to keep things in perspective, though: if the previous notable attempt by lawmakers to break up a company â the US vs. Microsoft in 1998 â is anything to go by, itâll be a very slow process with a very anticlimactic ending.
The bigger picture: Accept no imitations.
The lawsuit from Americaâs various states also focuses on Facebookâs data collection efforts, alleging the company is able to do what it likes with usersâ data as long as they have no better alternative. And because Facebook has so much of that data at its fingertips, itâll be able to keep building a customised experience other platforms just canât copy â keeping them out of the loop for good. | 