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FTC Eyeing Facebook’s Acquisition Strategy as Anti-Trust Probe Continues

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This week, the Federal Trade Commission (FTC) said it was looking at the social media behemoth’s acquisitions as part of its antitrust investigation. The question a lot of people are asking is: was Facebook simply aiming to buy up potential competitors? Photo Credit: Shutterstock

          The antitrust investigation of Facebook continues.

          This week, the Federal Trade Commission (FTC) said it was looking at the social media behemoth’s acquisitions as part of its antitrust investigation. The question a lot of people are asking is: was Facebook simply aiming to buy up potential competitors?

By Howard M. Riell

          What the company is buying – and why – is a large portion of the FTC investigation, according to sources.

          “FTC investigators are examining whether the company and its CEO, Mark Zuckerberg, purchased technology startups to keep them from challenging Facebook’s empire, the people said, some of whom added that the FTC has begun reaching out to the founders of such companies,” reported The Wall Street Journal. “The tech giant has acquired about 90 companies over roughly the last 15 years, according to data compiled by S&P Global. Among those companies are the photo-sharing app Instagram and the messaging service WhatsApp, which bolstered Facebook as a dominant force in social media and messaging.”

News media across the world have been reporting that FTC is looking specifically at the acquisitions of companies like Instagram and WhatsApp as part of an antitrust investigation. The agency wants to know if Facebook was attempting to wipe out possible competition.

“Facebook confirmed in its latest earnings report an FTC investigation was underway, but didn’t go into much detail beyond it having to do with “the areas of social networking or social media services, digital advertising, and/or mobile or online applications.” The acquisition aspect is reportedly the focus of the investigation. Facebook told Engadget it wouldn’t comment on the report.”

The new investigation comes on the heels of a $5 billion settlement between the FTC and Facebook that was agreed upon on July 24, according to digitaltrends.com. “The historic settlement is a result of violations Facebook made from a previous settlement with the FTC in 2012. As part of last week’s settlement, Facebook is required to designate compliance officers who will be responsible for the new privacy program. The social network will also have to implement an independent privacy committee of Facebook’s board of directors, which will be charged with creating greater accountability.”

The Department of Justice announced a broad antitrust review into Big Tech, most likely including Facebook, Amazon, Apple and Google, on July 23, the web site noted. “The department initially provided few details, only saying they would look into, “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

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