Facebook is another highly successful company. The social media app is the 8th largest business in the world, and it was created by Harvard alum Mark Zuckerberg. Facebook is known to have one of the greatest business models in the world, where it allows them to continue bringing in record amounts of revenue every quarter. Facebook holds the throne as the most used social media app, and they’ve also been the victim of antitrust accusations. However, this isn’t like Amazon where there is little regulatory pressure. Instead, Facebook is getting hammered.
On Thursday, the Federal Trade Commission, or FTC, announced that they filed a new version of their antitrust lawsuit against Facebook. The previous lawsuit was dismissed by a judge due to a lack of sufficient evidence, but the commission now believes they have that. The vote was 3 to 2, with each member voting along party lines. This was a bit controversial as Lina Khan, the Chairwoman of the FTC, voted too despite Facebook’s request that she didn’t because she has previously criticized Big Tech companies. The accusations include Facebook suppressing its competition through acquiring potential rivals, with the examples being WhatsApp and Instagram, and the use of strong-arm tactics on smaller companies who posed a threat. Some of the new arguments include daily and monthly user data, which shows Facebook holding a monopoly, but Facebook had some counters. For example, they questioned why the FTC didn’t investigate the WhatsApp and Instagram deals when they came through, and why they are suddenly doing it now. Either way, if this case isn’t thrown out, then we are in for a ride. What do you think about the new lawsuit and how it could affect Facebook stock?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.