Meta is having another one of those days where it finds itself in the headlines for all the wrong reasons.
First up is the Federal Trade Commission’s allegation that Facebook, as the company was called at the time, withheld information from the agency when the FTC was reviewing its acquisitions of Instagram in 2012 and WhatsApp in 2014.
Although it cleared the mergers, the FTC sued Meta in 2020 in an attempt to have them unwound. Meta is trying to have the suit thrown out, arguing that it’s invested billions in Instagram and WhatsApp and the antitrust agency hasn’t demonstrated how consumers are worse off. The FTC now claims that it had only undertaken a “limited review” of the deals when they happened “at Meta’s request,” and it “now has available vastly more evidence, including pre-acquisition documents Meta did not provide in 2012 and 2014.”
It's not clear from the FTC's filing what information Facebook allegedly withheld, though a spokesperson said that "some items noted in this filing are still under seal."
These days, many regulators view their clearance of the Instagram and WhatsApp acquisitions with embarrassment, as they allowed Facebook to snuff out potential competition in the social networking market, leading to a situation today where it’s tricky for many people to avoid using a Meta property. If you want to know why Big Tech mergers are these days more likely than not to be blocked in the U.S. and EU, here’s the textbook reason.
That said, unwinding these mergers would be seismic stuff. It wouldn’t be entirely unprecedented, as U.K. competition regulators forced Meta to unwind its 2020 purchase of Giphy a couple years ago, but the GIF repository is small-fry compared to Insta and WhatsApp, and a lot more time has passed since those deals went through. Indeed, even when the EU’s antitrust authorities fined Facebook $122 million in 2017 for giving them misleading information during the WhatsApp merger, that didn’t affect their approval of the deal as such.
So I’d be surprised if the FTC’s latest tactic manages to undo what was done a decade or more ago, no matter how naïve that approval may seem today. But it might at least stop the courts from throwing out the FTC’s suit before trial, which is what Meta is hoping will happen.
Meanwhile, back in Europe, the Italian antitrust authority today fined Meta €35 million ($38 million) for “unfair commercial practices.” Chump change, yes, but also yet another sign of how the antitrust and privacy regulation worlds are blurring into one another these days. Meta’s sin here was not properly informing people signing up for Instagram via the web that their personal data would be used for commercial purposes. Meta says it disagrees with the fine and is assessing its options.
Finally, stepping away from the world of antitrust, a former Meta engineer named Ferras Hamad has sued the company for discrimination and wrongful termination, relating to his February dismissal. According to Reuters, the Palestinian-American engineer says he was fired after “trying to help fix bugs” that suppressed Palestinian Instagram posts. Hamad also claims that employees using internal communications systems to mention the deaths of their relatives in Gaza found their messages deleted, and also that Meta investigated workers for using the Palestinian flag emoji, but not the emojis for the Israeli or Ukrainian flags.
This is by no means the first time that Meta faces allegations of censoring staffers when they try to speak out in support of Palestinians, in the context of the Israel-Gaza war. Last month, around 200 Meta employees wrote to CEO Mark Zuckerberg last month to decry the alleged practice, and human rights groups held coordinated online protests to back them up. Meta has not yet commented on Hamad’s suit.
More news below.
David Meyer
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