The Wrath Of Mark: 4 Takeaways From The Governments Case Against Facebook

Author : dardensteve

Publish Date : 2020-12-15 13:02:04

The Wrath Of Mark: 4 Takeaways From The Governments Case Against Facebook

This week, the Federal Trade Commission and 48 attorneys general unveiled blockbuster lawsuits accusing Facebook of crushing competition and calling for the tech giant to be broken up.

The twin complaints together run to nearly 200 pages documenting how Facebook became so powerful — and how, according to the government, it broke the law along the way.

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They accuse Facebook of, as the FTC puts it, "suppressing, neutralizing, and deterring serious competitive threats" to its own dominance in social media.

The company did so, the authorities allege, by swallowing some rivals — most notably photo-sharing app Instagram and messaging service WhatsApp — and suffocating others by cutting off valuable access to Facebook's data and systems.

Here are four key takeaways:

In Facebook's words: "It is better to buy than compete"

Both suits tell the story of Facebook's alleged misdeeds largely though the words of the company's own employees and executives, including CEO Mark Zuckerberg, thanks to troves of internal correspondence obtained by investigators.

"It is better to buy than compete," Zuckerberg wrote in a June 2008 email that the FTC complaint quotes to sum up Facebook's approach to up-and-coming rivals.

According to the lawsuits, Facebook officials repeatedly documented their concerns that the growing popularity of competitors Instagram and WhatsApp could break the company's hold on social media — a fear the government says motivated Facebook to spend lavishly to acquire the two companies.

Instagram "could be very disruptive to us" if it continued to grow independently, Zuckerberg warned in early 2012, as he was pitching the startup's founder on selling to Facebook, according to the attorneys general's lawsuit. He also discussed with another executive that one motivation for buying the app was to "neutralize a potential competitor."

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(Zuckerberg sent a follow-up email less than an hour later saying, "I didn't mean to imply that we'd be buying them to prevent them from competing with us in any way," according to documents released in a separate congressional investigation of the company.)

The word "threat" came up again and again when Facebook officials discussed WhatsApp and the rise of mobile messaging, according to internal communications quoted in the FTC suit.

"I personally think companies like WhatsApp are Facebook's biggest threat," a director of engineering wrote in July 2013.

"I don't think we've seen anything like the detail with which that story was told, backed up by records that come from Facebook," said Bill Kovacic, a former FTC chairman who now directs George Washington University's Competition Law Center.

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