Dan Howley of Yahoo Finance unpacks the FTC’s new antitrust complaint against Facebook.
Video transcript
AKIKO FUJITA: Welcome back to “Yahoo Finance Live”. Investors are currently ignoring the latest regulatory pressures Facebook is currently facing. The FTC earlier today filed a new antitrust complaint after a federal judge dismissed the previous complaint it had filed against the company.
Let’s take a look at Dan Howley from Yahoo Finance, who keeps up with the latest news for us. Dan, what’s the difference here when you look at the last complaint? Obviously, the FTC had the original complaint kicked out. They had time to reassess. What do you find in this folder?
DAN HOWLEY: Yes. This is not a new complaint. It is an amended version of the previous complaint. They are allowed to do this because it was rejected without prejudice before. Now the state complaint, which was completely dismissed. So it doesn’t come back. But this comes from the actual FTC costume.
And what they accuse Facebook of is what they say is an illegal buying or burying ploy to maintain its dominance in the market. And really, part of the problem with the previous complaint was that they hadn’t fully explained what private social networking industries were or what they were. And so they are doing it to a higher degree in this area.
They basically separate Facebook from Twitter, TikTok, and Netflix, saying they don’t quite fit the same description as Facebook itself. And then they also reinforce their explanation as to why they operate as a legal monopoly. So they are really moving forward here under President Lina Khan. She’s obviously one of the fiercest critics when it comes to tech.
Facebook initially tried to challenge her, basically saying that because of the statements she made, because of her participation in Congress and their look at tech companies and antitrust laws, she shouldn’t do so. part. But basically the FTC had gone ahead and looked at this and said no, she was going to stay on board. There really is no problem there.
And then, in terms of Facebook’s response, they basically said we’re looking at the FTC’s amended complaint. And we’ll have more to say soon. And that comes from a statement they posted on Twitter. This is also what they share with the media.
So I think this is really going to be a bigger issue. We will see if this can actually pass, in the first place, unlike the first complaint or the first part of this complaint. And really, what they’re looking for is kind of a separation of Facebook entirely from Instagram and WhatsApp. But it could be the most drastic step. There is something in between that the company may have to do to make the FTC happy in this case. Again, that’s if it manages to keep moving forward.
AKIKO FUJITA: And Dan, we’ve learned from past regulatory filings that these things don’t always move quickly. What kind of schedule are we currently envisioning? And what’s the next marker we should turn to?
DAN HOWLEY: Well the next scorer would be whether that is actually able to go ahead with the district judge who initially dismissed it without prejudice. So that’s something we’ll have to look at. Facebook will probably try to get this rejected as well. We’ll see how it goes. And then if the case ends up moving forward, it could take years and years.
Obviously, the great example that we always point to is Microsoft, which seemed to go on forever. The reason that might not be favorable is that Microsoft found itself behind in a number of categories as it focused on this costume. Facebook does not want to find itself in this position either. So maybe they are aware of it. I’m sure they are. They’re pretty smart people out there. And they may be able to keep innovating as they battle the costume. But it might also take their time. So if they don’t settle in, it could take years and years for it to move forward.
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