FTC Probes Facebook's Acquisition Practices

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FTC Probes Facebook's Acquisition Practices

After the agency confirmed it was fining Facebook a record-setting $5 billion for alleged privacy missteps, the agency is now investigating Facebook's purchases of companies like Instagram and WhatsApp as being part of its social media strategy to beat the competition.

According to a report from the Wall Street Journal published Thursday, investigators at the Federal Trade Commission (FTC) have been trying to contact the founders of companies that Facebook has bought up over the years.

As reported by the Wall Street Journal, the goal is to establish the reasons that led Facebook to proceed with the aforementioned acquisitions.

Both FTC and Facebook declined to comment on the report.

Facebook disclosed the FTC's investigation in its earnings announcement last week but provided few details.

The U.S. Justice Department said on July 23 it was opening a broad review of major digital technology firms, looking into whether they engage in anticompetitive practices, a clear signal that President Donald Trump's administration is stepping up its scrutiny of the industry. The fine now looks more a bargain giving Facebook the liberty to continue collecting and sharing user data to build its revenue through ads. United States dollars 5 billion is a large amount, the largest fine in fact in FTC's entire history, but Facebook apparently is a company much larger than that.

Critics of the company, including Democratic presidential hopeful Elizabeth Warren and cofounder Chris Hughes, have argued that Facebook should be forced to undo some of its past acquisitions.

Members of Congress have also expressed concern about Facebook's control of vast amounts of user data, citing the Cambridge Analytica scandal and a string of other privacy breaches. The case settled with Microsoft intact.

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