(Financial World) Faced with a large-scale antitrust investigation, Facebook must be "dismantled" in the future?
China News Service, Beijing, December 11 (Reporter Xia Bin) The time to come is still here, Facebook can't escape.
The antitrust investigations against Facebook that were launched in various parts of the United States in September last year have recently produced the latest results.
The US Federal Trade Commission (FTC) and attorneys general from 48 states and territories have jointly filed two independent antitrust lawsuits against Facebook.
Affected by this news, Facebook's stock price has plummeted, and according to the content of the lawsuit, it may face the destiny of "dismantling" in the future.
The FTC hopes that the Federal Court will issue a permanent injunction requiring Facebook to divest assets including Instagram and WhatsApp, prohibiting Facebook from imposing anti-competitive conditions on software developers, and Facebook must seek prior notice and approval in future mergers and acquisitions.
Why for the above two applications?
The FTC stated in the lawsuit that Instagram has been attracting users of Facebook's main application and that Facebook is trying to prevent Instagram's erosion of Facebook. It can be seen that Instagram's independence will pose a major threat to Facebook's social network.
At the same time, Facebook has been restricting WhatsApp to provide mobile messaging services, rather than allowing WhatsApp to become a personal social network provider that competes with Facebook's main application, and restricting the promotion of WhatsApp in the United States.
New York Attorney General Letitia James said that for the past decade, Facebook has been using its dominant position and monopoly power to suppress smaller competitors and stifle competition, all at the expense of ordinary users.
"This company acquired competitors before they threatened the company's dominance."
But Facebook's two acquisitions of Instagram and WhatsApp were approved by the FTC and antitrust regulators that year.
Facebook’s vice president and chief legal counsel Jennifer Newstead said that the FTC’s 53-page complaint did not mention that it had approved these acquisitions several years ago, and the government now wants to overthrow it and start over. This is an issue for American companies. The creepy warning, any transaction is not final.
Pan Helin, executive dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, said in an interview with a reporter from China News Agency that Facebook does have monopolistic behavior. It eliminated competitors through mergers and acquisitions, and after it was included, it restricted the independent development of these applications. On the one hand, it bought its subordinates, on the other hand, it tried to marginalize it and replaced the market of these potential competitors with Facebook as the dominant carrier."
Facebook must "dismantle" in the future?
"The final outcome of Facebook's monopoly case depends on whether there is evidence that it hinders the development of its competitors through mergers and acquisitions, and then gains a monopoly position by dominating the market." Pan Helin said that Facebook's current market share in the social field is undoubted, but its Whether it hinders the independent development of other innovative companies and competing companies, including whether Instagram and WhatsApp are intervened and curbed by Facebook is the key to the antitrust case.
In the United States, anti-competitive behavior and evasion of competition are monopolistic behavior.
In fact, Facebook is not the only one facing antitrust investigations.
The traditional American Internet giant FAAG (Facebook, Amazon, Apple, Google) has a sword of Damocles hanging above the head.
At the end of July this year, FAAG gathered for the first antitrust hearing.
The four CEOs spoke at the 5-hour hearing and all emphasized that the data showed that the market they were in was highly competitive and their innovative products and services provided convenience to consumers.
The lawmakers focused on the monopolistic behavior and unfair competition of these companies.
Pan Helin said frankly that the purpose of antitrust is to prevent large companies from harming competition, because only by maintaining competition can consumers benefit from competition from businesses.
But for the Internet industry, defining monopoly is not easy, because many services are free, and the boundaries and areas of services are quite complicated.
"The definition of whether Internet companies are monopolistic by various countries should be based on whether they have competitors and whether they hinder competition in the same industry. Market share is not a viable reference basis because the boundaries of the Internet industry are very blurred." Pan Helin said.
(Finish)