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Facebook shares drop on report of possible FTC injunction


steven36

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Facebook Inc. shares were down sharply Thursday on a report the Federal Trade Commission is weighing a preliminary injunction as early as next month against the social-networking giant  amid antitrust concerns over how its products interact.

 

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Federal regulators are closely monitoring how Facebook integrates its apps – specifically, Messenger, Instagram, and WhatsApp – or allows them to work with potential rivals, according to a Wall Street Journal report, citing unnamed sources familiar with the matter.

 

If it were to act, the FTC could seek to block Facebook from enforcing those policies on the grounds they are anticompetitive. Ultimately, this could lead to an injunction barring Facebook from further integrating apps as part of a potential breakup of the company, one person told the Journal.

 

Facebook shares were down 3.2% to $195.80 in trading Thursday.

 

Facebook and the FTC were not immediately available for comment on news of the injunction.

 

Facebook has been pushing to extend its reach, especially among young users who favor messaging networks, through interoperability between its three main services – Messenger, WhatsApp, and Instagram – on a private network.

 

“There are privacy and security advantages to interoperability,” Facebook CEO Mark Zuckerberg wrote in a Facebook post in March. “With the ability to message across our services...you’d be able to send an encrypted message to someone’s phone number in WhatsApp from Messenger.”

 

At the same time, the company said in a blog post Thursday that it does not plan to change its web-tracking practices to adhere to the California Consumer Privacy Act, which becomes law on Jan. 1. Facebook said its practices are in compliance with new law restricting “sale” of user” data.

 

And in a third piece of regulatory-related news, Bloomberg is reporting Facebook intends to spend $130 million over six years on its content oversight board, a third-party of advisers who will help decide whether posts violate Facebook’s policies.

 

Facebook, Alphabet Inc.’s Google, Amazon.com Inc. , and Apple Inc.   are the subjects of antitrust investigations by either the FTC or Department of Justice for their business practices.

 

Additionally, they are bracing for CCPA, and a raft of legislation from House and Senate members that ratchet up the privacy rights of consumers while tightening the rules of how companies handle individuals’ data.

 

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