Facebook co-founder and outspoken critic, Chris Hughes, collaborates with regulators investigating whether the company should be broken down for violation of antitrust rules. The Washington Post and New York Times both report that Hughes is assisting two prominent antitrust scientists and has met the FTC to discuss the investigation into the social media company he found in 2004.
The involvement of Hughes is considerable. He has already argued why Facebook should be broken. Now he can give researchers a list of people to talk to and give them critical insight into the motivations behind major Facebook acquisitions, even though he left the company more than ten years ago. This insight could be essential to successfully provide the antitrust argument to the FTC, alongside Scott Hemphill from New York University and Tim Wu from Columbia University.
According to The Washington Post, the two academics are trying to make an argument for the breakup of Facebook based on the acquisition of WhatsApp and Instagram. They claim that these acquisitions violate antitrust rules because Facebook used them to eradicate competition and strengthen its monopolistic position. If they can prove that the acquisitions violate antitrust rules, then they can argue for the reversal of the empire, similar to the disintegration of Standard Oil in 1911. "There is a direct link between behavior and the remedy – cancel the acquisition, "Hemphill said.
To make this argument, however, researchers would have to demonstrate that Facebook's intention was to wipe out future threats with the acquisitions. This is why the involvement of Hughes could be so useful; he can provide researchers with leads for former and current employees, as well as competitors, who can help researchers better understand what motivated the acquisitions. Facebook claims that its acquisitions & # 39; investments in innovation & # 39; were, according to a written statement from one of his managers.
According to an interview with Wu quoted by the Washington Post, the acquisitions were "clear vanilla violation of antitrust legislation, just low-hanging fruit". One expert, however, quoted by The New York Times suggested that it would be a harder antitrust case to prove. "This is not an easy thing," said a senior advisor from the Public Knowledge consumer group, Gene Kimmelman, who commented that the agency should also demonstrate economic damage and demonstrate that Facebook intentionally purchased competitors.
It is unclear whether the FTC will choose to continue the Hemphill and Wu research line. The NYT notes that the Office's investigations are usually conducted behind closed doors.
The Washington Post reports that Hughes became involved in the research after the two academics approached him after his "It's time to take Facebook apart" New York Times opinion piece. In his article, Hughes said that Facebook's monopoly position limits competition, suppresses innovation, and has enabled the company to accumulate huge amounts of uncontrolled power. The three then began to pitch their argument for the collapse of Facebook to lawmakers. According to edited pitch slides seen by the NYT, Hughes is listed as the third member of the group.
The news about Hughes' involvement in the investigation comes just days after Facebook has confirmed that the FTC is investigating the company for possible violations of US antitrust law. Apart from that, the Ministry of Justice also announced a broad antitrust investigation into the actions of major technology companies, including Facebook, Amazon and Google.
Facebook declined to comment on the New York Times on the Washington Post about the reports about Hughes' involvement in the investigation. Hemphill and Wu confirmed that Hughes was involved in the investigation, but refused to comment on the Times about the nature of his involvement.