Previously the FTC had been running such that, if it could not prove an acquisition was bad it would approve it.
In this case, back in 2012 Instagram was small, didn't charge money, and not considered a competitor to Facebook.
Well, we sure as hell know now it was a bad idea. Harmed consumer privacy, removed other competitors, and expanded the network effect of then Facebook.
And before anyone says "oh what about YouTube, X, TikTok, competitors" - Yes they should all be split off from their parent companies too.
My favorite was that the deal was where Facebook agreed not to import IG into FB. They have merged the two together so much so that if Facebook has a complete outage, so does IG. Not only that, but Facebook "magically" knows when I'm on IG and vice versa.
> They have merged the two together so much so that if Facebook has a complete outage, so does IG.
If AWS has a complete outage, so do many completely unrelated businesses. As a regulator, "running on the same infrastructure" would be the least of my worries and an acceptable carve-out for a "no integration" clause.
But on my Android I got no Threads. True, IG tries their best to convince me to install it. Maybe I don't have it because my IG was created before times?
Also, Facebook/Meta said they would not be able to link WhatsApp accounts to facebook accounts. After they were allowed to buy WhatsApp they unsurprisingly began using metadata for things like knowing who Facebook users are talking to.
They paid some fines that they show no sign of caring about.
I don't think the people running the FTC care what happens so long as they land a huge sum of money to satisfy their boss. I suspect the FTC is not long for this world anyway and after this, it'll be a much more direct threat. Maybe I'm too paranoid and pessimistic, but a year ago that wouldn't even have been a consideration. Now, it's a possibility.
This anti-big-tech hysteria in the US is dangerous. Applying early 20th antitrust thinking to modern tech companies is short sighted and doesn't show the whole picture. These American big tech companies that people like Steve Bannon and Lina Khan want to split up have been responsible for not only the impressive US GDP and wealth recovery and growth since the 2008 financial crisis but also for much of the rest of the world's wealth recovery and growth since the 2008 crisis.
Danish pension funds have 25% allocation on US stocks but ~70% of the total returns in 2022-2024 came from US stocks with big tech companies leading the charge.
Inequality is growing massively, it is also not necessarily the best use of capital, whilst this growth may be big, if it were not so concentrated it would likely be even larger. Concentration of capital leads to inefficiency, a small but relevant example, large mansions and super yachts. The marginal propensity to consume also needs to be considered, we live in a demand driven world.
Indeed. I'd argue that failing to apply robust antitrust enforcement (as the US hasn't in the last 20 years) is short-sighted.
It creates monolithic companies that are enormously profitable at the cost of innovation.
Fewer huge companies will never innovate as quickly as a diverse and competitive ecosystem, especially when the cost to develop and deliver is minimal.
Seen another way, the current Big Tech landscape creates artificial barriers that limit startups' access to customers compared to what the internet and mobile previously enabled.
> Fewer huge companies will never innovate as quickly as a diverse and competitive ecosystem, especially when the cost to develop and deliver is minimal.
It's not clear that this is true. Facebook produces a load of stuff out of its R&D budget that wouldn't be possible in 100 smaller companies.
The advantages of monolithic R&D driven by a profit engine are (1) funding scale & (2) longer-term planning.
The disadvantages are (3) leadership tunnel-vision (e.g. $$$$ to build the shittiest metaverse) & (4) political inertia (e.g. greenfield R&D being subject to high-level BigCo political jockeying, like Microsoft's killing anything internal that threatened Windows/Office revenue).
It's far from all-positive, and debatably less effective than making a larger number of more diverse bets and then letting customers decide which is best.
E.g. Facebook never would have created something as alien as TikTok
As far as I'm aware, the FTC's collections are unencumbered, so they just go into the general fund along with things like taxes. That's used to finance the basic and ongoing operations of the federal government. Collections by other agencies are sometimes earmarked by Congress to do things like set aside x% of collections to fund further enforcement actions or divert a bit into something like the SEC's whistleblower fund.
"Zuckerberg offered much less and hoped Trump would back him up."
I wouldn't be surprised if a certain amount was offered through backchannels to his family, and someway, somehow, Trump didn't have the influence over this case like was expected.
If you're looking to open a factory or build an apartment (or any other single digit million dollar thing that some government official can discretionarily double the cost of by being obstinate and forcing you to drag them through court) building one of the first things you do is internet stalk the key government officials figure out who their friends are and kick off a bunch of $200-2000 donations to whatever stuff the people around them are involved in (middle school drama club, local animal shelter, etc, etc).
With hundreds of millions at stake I would be very surprised if they weren't doing this and more.
Trump is offended by measly sums which Zuck has put in his pocket. Anti-trust crusade is a perfect way to shake more from him. Give the bully an inch, he will take a mile.
> “We haven’t been shy about explaining why it doesn’t make sense for the FTC to bring a case to trial that requires it to prove something every 17-year-old in America knows is absurd—that Instagram doesn’t compete with TikTok,” she said.
In this hypothetical scenario:
1. Instagram competes with TikTok, winning a minority share of the market.
2. The government decrees that TikTok is anathema and expels them from the market.
3. The government sues Instagram for having a supermajority share of the remaining market.
I feel like there should be a form of estoppel preventing the argument.
Maybe apps that take less than 3 minutes for a 17-year-old to install, register account, and learn how to use, are not really defensible "monopolies" and maybe these apps shouldn't be the target of antitrust laws that were intended for early 20th century robber barons.
The network effects, economies of scale, and associated ability to plough huge profits into buying up and out-promoting competitors absolutely make them monopolies.
Only after factoring out the effects of your integrity and self-respect. But I suppose that in Meta’s case we can assume that sort of pre-discounting of character was already done.
If you're going to be an ass kisser, you can't do it half way. You gotta make the ass being kissed like it's the only ass you'll ever kiss again. Phony ass kissing is so obvious that the ass being kissed is insulted even more. At that point, you'd have been better off doing nothing
Whatsapp and Instagram only compete with others if you can convince others to install another app and switch to it. Switching phones is easier, so is whatever else you personally use by far. I'm glad beeper exists, but it shouldn't have taken this long for it to exist. Only one way to reduce harmful network effects, give users more choice.
What would be the actual case against them these days? They've lost their dominant position in nearly everything except desktop OS, if they're being anticompetitive they're doing a pretty bad job of it.
Get fucked, Zuck. I hope the knee-bending was worth it! I also hope that any case (as one could be pretty sure there will be litigation over it) in the future finds in favor of the commission. The fine can't be big enough for the shit it's put the world through.
As your article states, even in 2022 this was done as well. Restricting China from getting top of the line GPUs is nothing new or unique to the current administration.
The difference is that Nvidia actually worked with the previous administration, had enough time to design chips that met the requirements and wasn’t stuck holding inventory.
Not holding my breath, Weimar industrialists were backing the conservative-Nazi alliance until conservatives were all gone. Modern American barons are of the same foreseeing capabilities (unless they’re Thiel who wants monarchy or whatever).
The bending of the knee wasn't followed by a briefcase full of cash, or a large enough donation to the campaign/library fund, or not enough meme coin purchase. Maybe he should have shown up to Mar-a-lago wearing a Trump watch carrying a Trump bible. In other words, Zuck didn't come across as truly loyal in his meetings with Trump.
Well put, perhaps this could be the beginning of a super rich person rebelling against the current administration? Goodness knows somebody needs to, or he will run them all over until it's time to completely burn the rest of us who don't have the means to defend ourselves in court. If recent news is to be believed from major networks simply reporting what trump says, NOTHING is beyond his contempt for anyone who doesn't bend the knee, which is un-american.
How I would hate to see Zuck of all people be displayed as some kind of key figure in resisting fascism. The enabler of ethnic purges, proven criminal, put up on whatever kind of pedestal. And then the silly people forever reminding me of it by saying something along the lines: "But look, he did something with his money! He got us freedom back!" or some other BS. Maybe I should already practice restraint, just in case.
Isn’t that pretty much the playbook though? The younger evil villain slays the older evil villain to take its place? Just because one slays the evil ruler doesn’t mean they are just themselves.
There is this silver lining to all the tech boot licking, it didn't even work. They should have just stood their ground, what was your soul worth, Jeff, Mark, etc.?
I'm not sure if they have a soul either. However, they hate losing money! Which we can call motivation to fight back in ways that us normals can't. After Elon loses enough money we may see a political divorce of epic proportions, that will be very entertaining to watch. (Can you imagine what it will be like if trump threatens the Starlink contracts?!?)
There is nothing wrong with acquisitions. It's one way big companies rejuvenate, and startups get a liquidity event. And if it's not an acquihire, the product can get broader distribution. Some companies are started to be acquired; their product of value mostly to big companies.
Why not let big companies die and be replaced by startups if the only way they can succeed is by [ab]using their incumbent position to “rejuvenate” (a euphemism if ever I saw one!)?
It would stop worse products winning as a result of resources gained through prior successes (and monopolistic practices).
In fact, I’d be happy to see a situation where sufficiently unrelated businesses have to be sold off after some grace period even if they were developed in house.
That's some euphemistic way of saying that monopolies can get even bigger without even any pretense of competition. We all know where this ends. The monopolists win big and consumers will have to suck it up.
No, it means the company can succeed and the service they built has a chance to continue. The choice isn't "be acquired or enter a Nirvana" it's often "be acquired or die".
