FTC: Breaking Up Google, Facebook Is A Possible Remedy

In both Europe and the US, there is a growing concern in in both political and regulatory circles that more dramatic measures are needed to address a concentration of power among tech giants. On the afternoon of August 13, the head of the US FTC said for the first time that breaking up companies was on the table.

It seems that breaking giants like Facebook and Google up is now a very possible remedy. This break up is something that several European Commissioners have brought up a few years ago, but only a few took it seriously at the time. The statement from FTC Chairman Joe Simons is different.

According to Bloomberg, Simons told it that breaking up companies could be “the right remedy” to restore competition. He is reluctant trying it unless it’s absolutely necessary. The Justice Department and the FTC are currently engaged in a broad review of the operations and business practices of Google, Apple, Facebook and Amazon.

The FTC could compel the “unwinding of acquisitions” such as Waze (Google), WhatsApp, Instagram (Facebook), among others. There have been suggestions that Facebook adding its brand to WhatsApp and Instagram is partly about making it hard for regulators to unwind those acquisitions.

Also, on August 14, over 20 European job search sites sent a joint letter to the EC as a prelude to formal complaints. These job search sites have argued that the company’s own job-search answer box is harming competition and hurting their traffic and profits.

Despite the fact that Google was fined $9 billion by the EC since 2017, and Facebook was recently fined $5 billion for data and privacy violations by the FTC, these fines have had little impact.

In Europe, Google was required to make changes in its operating practices, such as giving Android users in the EU a choice of search engines when they set up a new phone. This solution has proved to be controversial, as has its shopping search remedy introduced nearly two years ago.

Of course, Google is denying that these actions are anti-competitive or abusive. The company is appealing the European Competition fines and rules. According to Google, the innovations that they’ve introduced are benefiting consumers, which isn’t wrong.

European and American regulators are looking at the broader market impact of the company’s products and activities.

Until recently, there was a lack of philosophical agreement between US and European regulators, but now, it seems that there seems to be broad alignment, which can mean stronger regulatory action going forward.

Source – Greg Sterling