While Big Tech zips, regulators slog

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The year the Federal Trade Commission took over the Federal Trade Commission to flag its antitrust lawsuit against Facebook, Facebook has already changed its name and shifted its focus.

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Why this matters: Tech firms and Beltway regulators not only view issues differently, but also operate on wildly different scales of time – with DC’s glacial pace often putting it at a deep juncture in its quest to limit the tech giant’s power. leave at a loss.

Running news: Facebook, now Meta, on Tuesday lost a bid to dismiss the FTC’s antitrust case alleging that the firm planned to “buy or bury” competitors by buying Instagram and WhatsApp.

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Timeline: The FTC’s lawsuit will now progress to a lawsuit that could drag on for years, such as previous government litigation against Microsoft in the ’90s and IBM in the ’70s.

  • The discovery portion of the trial — which involves combing through mountains of documents and evidence — could easily take a year, said Joel Mitnick, a participant in antitrust and global litigation groups at Cadwalder, Wickersham & Taft and former FTC trial attorney.
  • Either party can proceed to a short judgment, a speedy decision by the judge that bypasses a full trial.
  • The results of any trial can, and should, generally be appealed.

During this, Meta can continue to buy smaller companies and invest in new lines of business as they wish.

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slow legal process In part, because the stakes are so high.

  • Antitrust decisions going against corporate giants are rare, but — like AT&T’s 1982 breakup — they resonate for decades.
  • FTC Suite – The Justice Department’s antitrust case against Google is a “major, historic antitrust action” as well, said Daniel Francis, former deputy director of the FTC Competition Bureau and lecturer at Harvard Law School.
  • This is not only about Meta/Facebook, but it will also help clarify the rules for acquisitions of budding or emerging competitors by firms across the economy – not just Big Tech companies,” Francis said.

Second aspect: Facebook acquired Instagram in 2012 and WhatsApp in 2014 – both long ago – causing some in the industry to cry foul.

  • Battery Ventures CEO Michael Brown told Nerdshala, the agency “shouldn’t go back in time”. “It has a chilling effect on businesses’ ability to make decisions for the long term.”
  • Instead, he argued, “the FTC and DOJ should play their part in postponing the merger at the proposed time.”

Between the lines: The shadow litigation that can be cast on a company’s operations — such as the threat of new legislation or regulation — can prompt businesses to make voluntary defensive changes much faster than a trial.

  • Meta, for its part, has made dozens of changes in response to regulatory threats, including changes to its algorithms, the use of facial recognition, the connection of Facebook accounts to Oculus devices, and its rules for political advertising.

reality check: The FTC faces what the judge in the case called “a long task in proving its charges” — but if it wins, Facebook could be forced to sell Instagram and WhatsApp .

  • “We will have massive new players within the online economy who will have the opportunity to enter a variety of businesses, including competing with Facebook,” Francis said.

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