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Bombshell antitrust investigation to focus on core of Facebook

Facebook announced on Wednesday that it’s being investigated by the Federal Trade Commission over potential antitrust concerns, and a source told Bloomberg the probe focus on its core business — social media.

This could mean that Facebook, known as the “big blue app” internally, and Instagram will come under scrutiny. Together, the two social media platforms have more than 3 billion users.

Bloomberg’s anonymous source said the FTC has already contacted third-parties to help it assess the competitive dynamics of social media.

With the focus kept on social media, it could mean Facebook’s growth into other markets is not of interest. Since its inception, Facebook has moved into encrypted messaging, AI, virtual reality, and it plans to launch its own cryptocurrency next year.

The announcement of the investigation came just hours after the FTC slapped Facebook with a record-breaking $5 billion penalty for its mishandling of the Cambridge Analytica scandal.

Antitrust lawyer Barbara Scalds told Bloomberg the FTC would need to find examples of Facebook damaging competition either through acquisitions or restrictive business arrangements.

“Somebody has to have raised with them actual conduct that would fall within the realm of antitrust harm, which is limiting innovation, raising prices, or restricting output… They could have restraints that limit people’s access, like vendors or other people’s access,” she said.

Internal Facebook documents released late last year showed that in 2013, CEO Mark Zuckerberg personally gave the go-ahead on restricting Twitter-owned looping video company Vine’s access to Facebook data, meaning Vine users couldn’t connect to Facebook friends in-app. Vine shut down in 2016.

The documents were published by the UK’s Digital, Culture, Media and Sport Committee. Chair Damian Collins said the Vine emails “show evidence of Facebook taking aggressive positions against apps, with the consequence that denying them access to data led to the failure of that business.” Facebook stringently denied this, saying “at that time we made the decision to restrict apps built on top of our platform that replicated our core functionality.”

This article was originally published on Business Insider. Copyright 2019.

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