FTC vs Facebook
What's new: This week, the Federal Trade Commission (FTC) and more than 40 states charged Facebook with anticompetitive behavior and demanded the company be broken up.
Why this matters: Facebook is worth $360-$525 billion.
Key points:
Critics say several of the social platform's acquisitions of up-and-coming rivals "were meant to be anti-competitive" and that Mark Zuckerberg's "reign of unaccountable, abusive practices against consumers, competitors and innovation must end."
But, similar charges have been leveled before and proving actual antitrust violations is no slam dunk.
For example, regarding the company's purchase of Instagram, prosecutors must demonstrate that [1] the market would have been better for consumers if this purchase did not happen (a theoretical proposition) and [2] that Facebook had the express purpose of killing off competition.
Even more challenging is the fact that antitrust laws were established before the modern internet and there's quite a bit of "translating" that goes on when applying these laws to tech.
What we're thinking: Look, we've seen this coming for awhile and no one should be surprised.
Klon Kitchen is a managing director at Beacon Global Strategies and a nonresident senior fellow at the American Enterprise Institute.
