LAST WEEK MARKED a year since investigative journalists revealed that Cambridge Analytica — a political consulting firm with ties to Steve Bannon — harvested the data of approximately 87 million users to manipulate their behavior and fight a “culture war” in America.
Since then, extensive reporting has unveiled the depth of Facebook’s misdeeds — some of which are under criminal investigation — to dominate at any cost.
This includes mounting evidence of anticompetitive behavior, including predatory acquisitions, blocking rivals from its platform, and undermining people’s privacy.
Since its founding, Facebook has acquired over 75 companies. This includes Instagram, which Facebook bought in 2012 for $1 billion, and WhatsApp, which Facebook purchased in 2014 for $19 billion. Through these acquisitions, Facebook now owns three of the top four, and four of the top eight, social media apps.
Not only have these purchases solidified Facebook’s dominance — people who want to leave Facebook have little other choice — they have also undermined innovation.
When Facebook acquired Instagram, the photo-based app posed a serious competitive threat to the social media company. It was growing faster than Facebook had at its peak, and was immensely popular among young adults and teenagers, a key demographic that Facebook was losing. Buying Instagram also enabled Facebook to make the switch to mobile, a market where Facebook was struggling to adapt.
Although this deal was not challenged by the Federal Trade Commission, it is clear in hindsight that this purchase enabled Facebook to swallow up its most significant rival in the social network market.
In another example, WhatsApp was an immensely popular messaging service that threatened Facebook Messenger. According to documents released by British lawmakers, Facebook used a surveillance tool to obsessively track WhatsApp, learning that WhatsApp’s market reach was expanding steadily and outperforming other popular apps.
Instead of protecting competition — as the antitrust laws require — the FTC allowed Facebook to cannibalize its competitors. Not only did the FTC’s inaction harm competition and innovation, it has also undermined users’ privacy. While Facebook promised when it acquired WhatsApp that it would protect its users’ privacy, it has since gone on to use WhatsApp users’ data for marketing purposes, a serious breach of its commitment.
When Facebook tried to increase spying on users in 2007, users pushed back — and Facebook switched course. But back then it faced competition. It was only after Facebook amassed dominance that it could successfully backtrack on privacy commitments and initiate widespread commercial surveillance of users. This dramatic decrease in privacy has amounted to quality degradation of Facebook’s service.
Finally, it has become clear that Facebook has responded to competitive threats by blocking them from its massive network. Facebook practically ended any chance of viability for Vine, a rapidly growing competitor, when Mark Zuckerberg personally decided to block it from Facebook’s network, knowing it would boost Facebook’s own video service and strangle innovation. And after its purchase of TBH, a popular polling application, Facebook eliminated it due to “low usage” despite promises to allow it to continue operating independently and under its own brand. This behavior is nothing short of predatory.
This pattern of anti-competitive conduct demonstrates that Facebook has used its dominance to erode innovation, degrade users’ privacy, and raise prices.
Yet every time Facebook’s misdeeds become public, it engages in apology tours, makes empty promises, and pivots to the next public relations crisis. Nothing actually changes.
Instead, the quality of Facebook’s services has continued to decline. Innovation has been stifled and competitors eliminated. All the while, advertising prices on the platform have continued to climb.
That’s why I have called on the FTC to investigate Facebook for breaking the antitrust laws.
Other enforcers, such as the Bundeskartellamt — Germany’s Federal Cartel Office, have already investigated Facebook and concluded that it has abused its dominant position, imposing “far-reaching restrictions” on Facebook’s ability to collect data because of its anticompetitive behavior.
The FTC has its smoking gun. It’s past time for them to do something about it.
David N. Cicilline, a member of the House of Representatives from Rhode Island, is chairman of the House Subcommittee on Antitrust, Commercial and Administrative Law.