Facebook leak hints at its defense against a government-ordered breakup
Facebook is under intense regulatory pressure, and it appears to be bracing itself for the worst. The Wall Street Journal says it has obtained a document outlining Facebook’s defense if the government orders a breakup that would unload Instagram and WhatsApp. The social media giant would reportedly argue that a split would be a “complete nonstarter” based on officials’ past actions — or lack thereof.
According to the leak, Facebook would contend that its acquisitions of Instagram and WhatsApp passed FTC scrutiny without objections, leading it to pour massive amounts of money into both projects as it integrated them into its operations. A breakup would require spending billions and running separate systems that reduced security and hurt the user experience, Facebook would claim.
Facebook has declined to comment on the apparent leak. In the past, it has pushed for extra regulation (albeit limited) in place of a breakup.
There’s no certainty a defense like this would hold up. Columbia University professor and tech policy expert Tim Wu said that pointing to the FTC’s past approval would be “weak.” The regulator hadn’t considered the possibility that Facebook was buying Instagram and WhatsApp to squash competition, Wu said — it wasn’t going to rule out a breakup as circumstances changed. The difficulty of a breakup might not factor into the decision, either.
Facebook might have to offer some kind of defense before long. The FTC is rumored to be readying an antitrust lawsuit by the end of 2020, and the House could release its antitrust investigation results later in October. Neither is likely to be particularly kind to Facebook, and a split-up could easily be on the table.
(2)
