Silicon Valley’s most prominent players, already under scrutiny from the Justice Department over antitrust issues, may see their dominance further threatened by a Federal Trade Commission whose chief says he would be willing to break up the companies.
Joe Simons, who serves as the commission’s chairman, told Bloomberg in an interview he would consider unwinding past acquisitions made by the firms as a means of fostering competition and curtailing their power.
“If you have to, you do it,” Simons said. “It’s not ideal because it’s very messy. But if you have to, you have to.”
Big tech companies have found themselves in the crosshairs of the FTC and Justice Department as they have grown in power and size, making it tougher for smaller, newer competitors to get into the marketplace.
In February, the commission launched a technology task force designed to monitor competition in the sector and investigate any anticompetitive conduct, and Facebook acknowledged in financial filings last month that it had been targeted by the agency.
In the 15 years since the Menlo Park, California-based company was launched by CEO Mark Zuckerberg, it has acquired Instagram, a photo-sharing platform, and WhatsApp, an encrypted messaging service. Both blockbuster deals were approved by the FTC, which oversees enforcement of federal antitrust laws, but it has the power to reverse itself.
The commission, Simons said, could say “we made a mistake,” though any undoing of the deals would need to be approved by a court.
The FTC’s scrutiny of the industry runs alongside a broad antitrust review of “market-leading online platforms” launched by the Justice Department last month to examine how the tech giants gained market power and whether they engaged in practices that stifle competition or harm consumers.
The parallel investigations suggest the FTC and Justice Department “could be investigating the same company at the same time but just for different conduct,” Simons told Bloomberg.
As Silicon Valley’s giants expand, political leaders on both sides of the aisle have called for the companies to be broken up. 2020 Democratic presidential candidate Elizabeth Warren urged the government in March to take apart Amazon, Google, and Facebook and argued doing so would allow the next generation of tech companies to thrive. Sen. Ted Cruz, R-Texas, has also proposed antitrust action against tech firms.
Zuckerberg, meanwhile, has embraced the prospect of more government regulation of his company and other platforms, but has spurned calls for Facebook to be broken up. Such a move against the company, which has 2.4 billion monthly users, would only make it more challenging to address issues like user privacy and the proliferation of harmful content on the platform, he said.
But Facebook co-founder Chris Hughes disagrees, calling Zuckerberg’s power “unprecedented and un-American.”
