The lawsuits could be the start of Facebook’s toughest regulatory challenge to date.
Facebook has been in Washington’s glare for years as lawmakers from both parties raise concerns the company has grown too powerful. The lawsuits could kick off a likely years-long, multi-front legal battle that could potentially result in a breakup of the company or new restrictions on its business practices.
The lawsuit also is indicative of a broader effort in Washington to rein in the power of Silicon Valley. It will be the second major tech antitrust case to be brought this year, after the Justice Department slapped Google with a major antitrust suit earlier this year. A House investigation also found that Facebook and other major tech companies engaged in anticompetitive behavior earlier this year.
Here's what to expect:
The Facebook suits probably will focus on the companies’ purchases of Instagram and WhatsApp.
Investigators homed in on how the popular photo-sharing app and messaging service changed since Facebook purchased them, according to my colleague Tony Romm.
The government regulators have considered whether to argue that the deals left Facebook users with worse services — and fewer privacy protections — than they might enjoy if the companies had never been folded into the Facebook empire.
These acquisitions were a key focus of the recent congressional investigation into power in the tech industry, which accused the company in a report of seeking to buy up “its competitive threats to maintain and expand its dominance.” The House antitrust subcommittee's investigation exposed key communications from Facebook officials discussing a “land grab” by snapping up rivals on the rise before they could significantly threaten Facebook's business. They produced a 2018 memo prepared for Facebook chief executive Mark Zuckerberg that appeared to show that Facebook was more concerned about competition from its own subsidiaries than outside social networks.
Those investigators determined that the Instagram purchase essentially “tipped the social networking market toward a monopoly, and now considers competition within its own family of products to be more considerable than competition from any other firm.”
Privacy changes at WhatsApp could particularly come into focus.
WhatsApp was known for its strong privacy protections as one of the most popular encrypted messaging apps in the world, and Facebook promised regulators that it would continue strong privacy protections when it bought the company in 2014. But years later, the company's critics have grown concerned with how Facebook has leveraged data from the messaging app with other Facebook services. That's gained controversy particularly in light of Facebook's other privacy problems, which already resulted in the company reaching a $5 billion settlement with the FTC.
WhatsApp's founder left the company in 2018 following clashes with Facebook over its attempts to use personal data and weaken encryption, as my colleague Elizabeth Dwoskin has reported.
Facebook will be on the defensive.
Zuckerberg has promised to aggressively fight any government lawsuits in private with his employees.
“I don’t want to have a major lawsuit against our own government,” Zuckerberg told employees in response to calls from politicians to break the company up, according to a transcript of an internal meeting obtained by The Verge. “But look, at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight.”
Facebook has not publicly commented on potential lawsuits, but it has been aggressively defending itself both privately and publicly against antitrust scrutiny. Zuckerberg has testified in front of Congress multiple times this year, including at a key hearing on the industry's power in July. Zuckerberg argued that the company faced significant competition, and he argued the company has been successful because it continues to build products that bring value to people's lives. He argued that the acquisitions didn't dampen competition and instead allowed those services to grow worldwide.
Facebook could also end up in the crosshairs of the incoming Biden administration.
The states' lawsuit would not be impacted by the transition of power, but it's expected that Democratic control of the White House and Federal Trade Commission could increase pressure on the social network.
President-elect Joe Biden frequently criticized Facebook on the campaign trail, particularly for not doing enough to prevent the spread of misinformation and lies, especially shared by President Trump. Biden campaign officials have continued to criticize the company on Twitter following the election.
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Google removed some of online holding company IAC's browser extensions for policy violations.
Google did not specify which policies IAC violated, Kanishka Singh at Reuters reported. “We’re reviewing the remaining extensions and our enforcement options, and have not made a decision regarding IAC’s status on the store,” a Google representative said in a statement to Reuters.
Google found that IAC's browser functions misled consumers with nonexistent functions and steered users toward extra ads, the Wall Street Journal reported yesterday.
Google executives were reportedly reluctant to remove the extensions over fear that it would fuel antitrust claims against the company. The Justice Department sued Google in October for multiple violations of antitrust law.
IAC, which owns Angie's List, Vimeo and Care.com, offers its own search engine and is one of Google's biggest advertising clients. IAC's chairman, Barry Diller, is an outspoken critic of Google. He called the company a monopoly and alleged that it had acted anti-competitively toward companies in IAC's portfolio in a September interview with The Technology 202.
IAC spokeswoman Valerie Combs disputed claims that the extensions violate Google policies.
“Google has taken hundreds of millions of dollars from us to advertise and distribute these products in the Chrome Store,” Combs told the Journal. “There’s nothing new here — Google has used their position to reduce our browser business to the last small corner of the Internet, which they’re now seeking to quash.”
The Treasury Department won't take action against TikTok for failing to meet its deadline to sell.
The Treasury Department declined to give the video app's Chinese owners another extension on its deadline to divest its U.S. assets, Jay Greene reports.
But the agency won't force a sale either, it said. Instead, the two parties will continue to work on ironing out a deal that would meet regulatory approval, the Treasury Department said. TikTok has been in talks to launch a new company with investments from American companies Oracle and Walmart. The deal appeared to have the president's blessing but negotiations stalled.
A Treasury-led interagency committee determined earlier this year that the company's Chinese ownership posed a national security risk, and ByteDance would have to divest if the app wanted to continue U.S. operations. Trump threatened to ban the app by executive order, but the effort has been tied up in the courts.
The U.S. government claims TikTok could be compelled to share U.S. user data with the Chinese government, a claim it denies.
Police departments are turning to autonomous drones during the pandemic. Civil rights advocates are raising concerns.
Chula Vista, Calif., the first city in the country to adopt a first responder program using drones, uses the technology to respond to as many as 15 emergency calls a day, Cade Metz at the New York Times reports. Three other cities have recently launched similar programs.
The cost is dramatically lower than owning and operating helicopters for the same job. But like with other surveillance technologies, civil rights advocates worry that the technology could give police officers a way to target certain communities or violate the privacy of citizens not suspected of a crime.
“Communities should ask hard questions about these programs. As the power and scope of this technology expands, so does the need for privacy protection,” said Jay Stanley, a senior policy analyst with the American Civil Liberties Union’s Project on Speech, Privacy and Technology. “Drones can be used to investigate known crimes. But they are also sensors that can generate offenses.”
Police departments argue that the technology has been a boon during the pandemic.
“We’re just trying to limit our exposure to other people,” Rahul Sidhu, an officer in Redondo Beach, near Los Angeles. “Sometimes you can send a drone without sending an officer.”
Biden picks California Attorney General Xavier Becerra, a leading tech critic, to be his health secretary.
Becerra has led the effort by Democratic states to prevent the Trump administration from overturning Obamacare, Michael Balsamo and Ricardo Alonso-Zaldivar report at the Associated Press report. As Attorney General, Becerra spearheaded the enforcement of California's landmark privacy law and has investigated tech giants including Facebook, Google and Amazon. (Amazon chief executive Jeff Bezos owns The Washington Post.)
- The Atlantic Council will hold an event on the incoming U.S. administration and the future of supply chains in the Americas on Dec. 9 at 2 p.m.
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The only thing more cringe-worthy than another election sketch.