With its groundbreaking antitrust lawsuit against Facebook, the Federal Trade Commission is going against more than just fighting a multi-billion dollar tech giant – it’s fighting to get credit back. could determine the future.
The FTC was wholly criticized by lawyers on both sides of the aisle following a technical hawk privacy settlement that was deemed toothless. In July 2019, the group settled a privacy review into Facebook after the Cambridge Analytica scandal for $ 5 billion, representing about 9% of the company’s 2018 revenue. Shortly afterwards, he settled allegations of child privacy breaches on YouTube by Google for $ 170 million.
“The FTC is foolish & stupid to rely on money alone to punish decades of past privacy breaches & continued profit,” Sen. Richard Blumenthal, D-Conn., tweet at the time of Facebook configuration.
Long before that, the group closed a review of Google’s competitive practices without incurring costs suggested by employees. Nearly a decade later, the DOJ has raised competition charges against the survey giant.
The commission ‘s deliberate failure to hold technical giants to account in the eyes of some lawyers has threatened FTC. The Sen. suggested. Josh Hawley, R-Mo., Last year denied the entire group be a division of the Department of Justice and reaffirmed all competition enforcement powers under the DOJ Antitrust Division.
That adds meaning to the FTC’s actions against Big Tech companies. The FTC differs from the DOJ in that it is independent of other government branches. FTC Chairman Joe Simons last year confirmed that it is a structure that makes the group so valuable, although he agreed with DOJ antitrust chief Makan Delrahim that cracking down on enforcement power is against trust between two group causing inefficiency.
That was the backdrop in which Simons made the breakout decision from his Republican contemporaries to become a decisive vote in bringing a case of trust against Facebook in federal court. Just about a week later, he joined most of his colleagues in voting for a comprehensive review of the privacy practices of nine technical companies.
Simons made it a priority during his time at the helm of the commission to expand and focus his knowledge in the tech sector, said someone familiar with the FTC’s thinking that it was only authoritative to speak back-to-back. information. That meant creating a Technology Action Group within the commission, now called the Technology Implementation Department.
It was within this context that the FTC decided to pursue an anti-trust investigation into Facebook. Facebook unveiled the study last year, just after being fined $ 5 billion from the group. The FTC usually opens conduct investigations after one of three things has happened, according to the source: 1) someone complains about a company’s conduct to the commission, 2) states or the Department of Justice refer a case to the organization, or 3) new information is fired through a public statement.
For Facebook, it was the third option that prompted the investigation, the source said, refusing to specify the newly implemented information.
The FTC’s decision to push costs in the Facebook case was praised by its recent critics. The lawsuit is a broad testament to Facebook’s activity and build strategy, which the Commission argues demonstrates its efforts to illegally maintain monopoly power in personal social networks. The case focuses specifically on Facebook’s acquisition of Instagram and WhatsApp – two unions that the FTC reviewed before being consummated.
Facebook’s top adviser in the lawsuit called for the government’s attempt to “get over”, sending a cold warning to American business that no sale is ever final. “
While it is a matter of law, the FTC’s decisions not to suspend the unions in the first instance do not accept any legal opinion, it is likely that Facebook is pushing the point in court, according to trust experts.
“Certainly there were some of those warning signs,” Delrahim, the DOJ’s head of trust, said in an interview with CNBC this week. “If you go back to Microsoft, the Federal Trade Commission looked at that and they didn’t take a case until the Justice Department in the Clinton administration took it under Joel Klein and brought the case in. That’s not it. The FTC ‘s view is against the DOJ, but it’ s a statement that, sometimes when you don’t have decisions in an executive team, decisions are much more difficult and may not be as good. “
Delrahim favors a structure where responsibility is concentrated in one person, as at the Department of Antitrust, where he has the final say in taking enforcement action. At the FTC, by contrast, five commissioners must vote on whether a case should be brought to fruition, with no more than three commissioners at any one time coming from the same political party.
“There is no question in my mind that it is the right thing to do to bring the two groups together, but that is not a decision that I will make,” Delrahim said.
The source who was familiar with the FTC’s thinking defended the commission’s structure, saying the group’s bipartisan tradition means that things go through intense debate and scrutiny before they ever reach the public eye, without them. make stronger along the way. They identified the FTC’s legal record, confirming the notion that the deliberative model has delayed its efforts. The group has brought important, if not widely followed, antirust issues to the tech sector over several years, such as against chipmaker Qualcomm and e-ordering platform Surescripts, they said.
When it comes to Facebook’s own case, Delrahim described many parts of it as “sound,” especially the aspect that includes Facebook’s use of app programming interfaces (APIs) to cut competitors from his platform. It also protected the legitimacy of privacy as an element of potential harm to users.
“The issue of privacy as a quality element of competition is a very legitimate issue,” Delrahim said. “Many people over this debate have broken trust levels by just looking at price effects and that’s not just it. true. “
Just taking such a large lawsuit is already an important step for the FTC. But it comes with high stakes. If the government does not prove its case in court, there is a risk that more case law will be created that will be unfavorable to monopoly challenges in the future, possibly further cooling enforcement in the area.
But if he wins, he could enter a new era of trust coercion.
“If you never take Section 2 [Sherman Antitrust Act] an issue like the government, you start to introduce monopolists, “said Sam Weinstein, a former DOJ trust attorney who now teaches at Cardozo Law.” start thinking, ‘we can do whatever kind we want here, the government is afraid to litigate. ‘”
Weinstein said the issues themselves are “terribly PR” for the companies and show peers “that the government wants to do this. It’s not theoretical anymore; it happens.”
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