FTC said to look at Facebook's Instagram and WhatsApp purchases
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The Federal Trade Commission's antitrust probe of Facebook is looking at whether the social network used acquisitions to take out its competition, according to the Wall Street Journal.
Why it matters: It suggests that the agency was serious when it said it might look at already-completed mergers and acquisitions as part of a broader review of the tech sector.
Flashback: Two major acquisitions, of Instagram and WhatsApp, have given Facebook a shield against declining user growth on its classic social platform for nearly a decade.
- It bought Instagram first, in 2012, for $1 billion.
- It purchased WhatsApp two years later for $19 billion.
In recent years, critics have contended that those deals allowed Facebook to stifle competition.
- They say Facebook has used proprietary data, via a virtual private network called Onavo that it acquired in 2013, to identify small companies gaining market share and buy them before they can present too much of a threat.
- Presidential candidate Sen. Elizabeth Warren (D-Mass.) has called for appointing regulators who might be willing to unwind those acquisitions by Facebook, and other purchases by major internet firms.
Yes, but: The exact nature of the FTC's inquiries are not yet clear. Investigations are generally cloaked in secrecy and can take years.
The bigger picture: The increased antitrust scrutiny of major tech giants may already be affecting their decisions about what companies to acquire — and whether the extra fight in D.C. is worth the effort.
