Market Overview

Report: FTC Has Inside Scoop Of Facebook's Wrongdoing

Report: FTC Has Inside Scoop Of Facebook's Wrongdoing

The U.S. Federal Trade Commission has been holding talks with current and former Facebook, Inc. (NASDAQ: FB) competitors as part of an ongoing investigation into the social media's business practices, sources close to the matter told The Wall Street Journal.

What Happened

Rival social media company Snap Inc (NYSE: SNAP) is one of the current competitors in talks with the FTC, WSJ sources said. Snap has been keeping notes on Facebook's business practices, including discouraging its users from referencing Snap on their Instagram profile through threats of having their verified check mark removed.

Also, Facebook may have been able to collect data on Snap users like how much time it spent on specific features through a company it acquired called Onavo.

The FTC may have also held talks with failed startups who lost access to Facebook's platform as well as entrepreneurs who sold their business to Facebook, according to the sources.

A Facebook spokeswoman told WSJ its business thrives on taking existing concepts and ideas and "making them better or taking them in different directions."

Why It's Important

The FTC appears to be "putting together a picture" of what could prove to be a recurring pattern of Facebook's ambitions to "prevent competition," Gene Kimmelman, an adviser to consumer group Public Knowledge, told WSJ.

The FTC is joined by other regulatory bodies like the House Judiciary Committee in taking a closer look at Facebook's business. The House panel holds no enforcement power against a company although the FTC does, according to WSJ.

Related Links

Facebook Moves To Better Vet Ad Buyers Ahead Of 2020 Election

New York AG Confirms Antitrust Investigation Into Facebook, Google Is Reportedly Next

Posted-In: FTC social media Wall Street JournalNews Legal Tech Media Best of Benzinga


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