After over a year of speculation since the FTC (Federal Trade Commission) was reported to be investigating Facebook over confidentiality lapses, the regulator has officially declared the terms of its settlement with the besieged social network: $5 billion and enhanced privacy management within the organisation.
Facebook’s investors were not appalled by the reported $5 billion FTC fine after bouncing it into share value expectations, however Facebook’s acceptance under investigation by the FTC over antitrust issues was a disappointment.
NY based Attorney General Letitia James disclosed this morning that she’s heading for an investigation into Facebook over antitrust issues — in other words, whether the platform had employed its social media dominance to partake in anti-competitive behaviour.
In a statement, James said, “Even the largest social media platform in the world must follow the law and respect consumers. I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk. We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”
“People have multiple choices for every one of the services we provide,” Facebook’s vice president of state and local policy Will Castleberry said in a statement after the new investigation was announced. “We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the US but around the globe. We will of course work constructively with state attorneys general and we welcome a conversation with policymakers about the competitive environment in which we operate.”
Facebook had disclosed in its Quarter-2 earnings release that it has paid the record fine and succumbed to certain privacy provisions, but a short sentence in a release also remarked that the company’s FTC hurdles may carry on.
The release read :“The online technology industry and our company have received increased regulatory scrutiny in the past quarter. In June 2019, we were informed by the FTC that it had opened an antitrust investigation of our company. In addition, in July 2019, the Department of Justice announced that it will begin an antitrust review of market-leading online platforms.”