Instagram and WhatsApp in the crosshairs

by | Mar 17, 2021 | Media

Founding partner Juan Carlos Gomez discusses the judicial and media froth that once again reveals that regulators and authorities are outgrowing the Big Tech challenge:

Last Wednesday, the Federal Trade Commission (FTC) and a coalition of 48 states launched the largest judicial crusade seen in 100 years of US antitrust enforcement.

Facebook is accused of creating and maintaining dominant market power through an anti-competitive strategy of acquiring potential competitors and shutting out software developers who might challenge it.

Facebook’s acquisitions of Instagram (2012) and WhatsApp (2014) are in the spotlight. They remind Mark Zuckerberg that, before taking Instagram, he saw it as “a vibrant, innovative social network and an existential threat to Facebook’s monopoly power”. Thanks to these acquisitions, Facebook now controls the four most downloaded social networks in the world.

Surely if they were not under its umbrella, Facebook today would be facing competitive pressure from Instagram and WhatsApp. The political future of many countries would have been different and the story of traditional media, user experience and privacy protection would have been different.

Facebook defends itself by saying that the company helped grow and power these apps and that users are not forced to choose the free and ad-supported services it provides but do so because of the immense value it provides.

The legal battle is just beginning. It will be a long time before a court decision is made, which would not necessarily be adverse to Facebook. There would be little point in reversing these transactions; there are no longer competitors capable of challenging Facebook and no incentive to innovate and create applications to unseat it. It is clear that the authorities that approved these acquisitions in 2012 and 2014 were naïve in considering their effects on competition.

We are possibly facing a judicial and media froth that, once again, reveals that regulators and authorities are outgrowing the challenge of Big Tech, whose power, influence and impact on humanity is comparable to that of a sovereign state.

Juan Carlos Gómez Jaramillo
Founding Partner

El Espectador- Instagram y Whatsapp en la mira