DOING BUSINESS WITH FACEBOOK – TECH

FaceBook’s aggressive operating practices against competitors have long been a concern in the tech industry.  But until now, little overt action has been taken.

That appears to be changing – for one thing, there’s an ongoing antitrust investigation that gives competitors the chance to air concerns about Facebook’s hardball tactics (ref WSJ).  Snap Inc. is currently in the process of sharing the contents of a document that their legal team has put together over the years, chronicling the ways that Facebook has been trying to thwart competition.  The dossier, called “Project Voldemort,” has listed time and circumstance of moves such as discouraging popular account holders or influencers from referencing Snap on their accounts on Instagram (which is owned by Facebook).  In addition to hearing Snap’s information, the Federal Trade Commission investigators have made contact with dozens of tech executives and app developers in recent months, in addition to talking to executives from startups that became defunct after losing access to Facebook’s platform and those executives who sold their companies to Facebook.  These discussions have focused on the aggressive growth tactics that propelled Facebook from a social network for college students 15 years ago to a collection of services now used by more than one in four people in the world every day (ref WSJ).  It’s said that these talks are a sign that the FTC might be trying to put together a picture of “what is a pattern of behavior to prevent competition to the core Facebook business.”  It has reached the point of seriousness so that senior leaders at Facebook are concerned about the possibility of rivals divulging damaging information to federal officials and have, thus, discussed ways to “improve the company’s relationships around Silicon Valley.”   Hmmm, sounds like more plans for intimidation, which hopefully won’t work so well this time around.  Facebook has claimed that its acquisitions actually fuel innovation, rather than stifle it, saying that the addition of new features and services over the years has given consumers more choices – all aligned with Facebook’s money-making effort, of course, and not with that of the original owners of the “acquired” sites.  The House Judiciary Committee has been looking into various concerns about Facebook’s actions, but lacks the ability to take enforcement action; however, the FTC can move on enforcement measures.  At a recent “swing” through the nation’s capital, Zuckerberg was asked by lawmakers if he would be willing to show his good faith by selling Instagram and allowing other companies to compete – and he said “no.”  So, sounds like it will take some “persuasion” in order to make things happen with more equality for competitors trying to do business in the Facebook environment.

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