- Federal Trade Commission chairman Joe Simons told Bloomberg he’s willing to break up the major US tech firms if necessary, the first sign that US regulators might take drastic action against Silicon Valley.
- “It’s not ideal because it’s very messy. But if you have to you have to,” said Simons.
- The FTC is currently investigating Facebook over antitrust concerns.
- Visit Business Insider’s homepage for more stories.
The chairman of the Federal Trade Commission has sounded a warning bell, saying he’ll break up big tech companies if he has to.
FTC chairman Joe Simons told Bloomberg in an interview on Tuesday that breaking up over-dominant tech companies could be an option.
“If you have to, you do it… It’s not ideal because it’s very messy. But if you have to you have to,” he said, according to Bloomberg.
It’s the first major indicator that the FTC is weighing any such action. The regulator is currently investigating Facebook over antitrust concerns, and while Simons didn’t give any further details, he did mention one of Facebook’s most successful acquisitions — Instagram.
The FTC approved Facebook’s $1 billion acquisition of Instagram in 2012, in a move that is now considered to have pre-emptively scuppered a potential competitor. Instagram was becoming increasingly popular on mobile among younger users at the time. The FTC also subsequently approved Facebook’s acquisition of WhatsApp in 2014.
“There’s a question about what caused Instagram to be as successful as it is,” said Simons. “Was it the fact that the seed was already there and it was going to be germinated no matter what or was the seed germinated because Facebook acquired it?”
According to Simons it’s for the agency to say “we made a mistake” and break Facebook and Instagram up.
Some politicians, including Democratic presidential candidate Elizabeth Warren, have voiced their support for splitting big companies apart from their acquisitions. Facebook CEO Mark Zuckerberg has pushed back, saying that separating Facebook from Instagram and WhatsApp will make it harder for those companies to regulate their platforms for harmful content, having been cut off from Facebook’s considerable resources.
Facebook was not immediately available for comment on Simon’s remarks.
Both the FTC and the Department of Justice have kicked off major antitrust investigations into big tech. Whereas in the past reports suggested that the two agencies would divvy up the individual companies, Simons told Bloomberg they are dividing labor by conduct.
“It’s possible for sure that we could be investigating the same company at the same time but just for different conduct,” he said. An example he gave was that the FTC could scrutinize Amazon for acquiring a grocer, while the DOJ could simultaneously focus on Amazon acquiring a music-streaming service.
Published at Wed, 14 Aug 2019 09:39:16 +0000