Ex-FTC Official: Length of Facebook Probe Could Mean Harsh Penalty
The longer the FTC’s Facebook-Cambridge Analytica probe lasts (see 1808220030), the worse the outcome could be for Facebook, said former FTC Deputy Chief Trial Counsel Michael Kades Tuesday. “If you’re really going to try to hammer a company in a new way, you get your ducks in a row.” Kades at a New America Open Technology Institute event noted the agency is likely preparing for all possible rebuttals. “That the FTC hasn’t done anything on the Facebook [probe] yet, I don’t think that means anything," he said.
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Kades said the EU’s $5 billion fine alleging anticompetitive behavior from Google on Android (see 1810170039) isn't “outside the box in any significant way. Maybe American antitrust enforcement needs to be a little more willing to take risks to protect competition.” He's Washington Center for Equitable Growth director-markets and competition policy.
A platform's size isn't the primary antitrust concern, panelists said, but enforcers should be examining whether companies are unfairly leveraging positions. Issues arise when a company uses its position to slant the playing field and harm innovation at the edges of a platform, said Econ One Research Managing Director Hal Singer. The purpose of antitrust enforcement isn't to break up companies because they are big, said Public Knowledge Policy Counsel-Competition Charlotte Slaiman. Big isn't necessarily bad, but there's evidence of a monopoly problem, Kades said.
Facebook buying Instagram is problematic in hindsight, Slaiman said, suggesting agencies should access data companies use to determine when to buy competitors. She cited recent remarks from Lina Khan, staffer for FTC Commissioner Rohit Chopra. Khan said at a recent agency hearing that enforcers should be wary of seemingly harmless deals (see 1810170069). It seems “so obvious now” that Instagram would have become Facebook’s largest competitor, Slaiman said, urging agencies to “get creative.” Echoing remarks from the hearings, Kades said enforcers need to be concerned about competition for the market. The agency will hold its fifth policy hearing Thursday (see 1810120038).
Citing Saturday's Pittsburgh synagogue shooting, Singer said platforms like Facebook have allowed their networks to be overrun with “Russian agents and white nationalists” because peddling in conspiracy pays, leading to radicalization and violence. Market forces can’t be counted on to bring a solution, he said, calling the notion of self-regulation a joke. Singer and Slaiman argued for sector-specific regulations to fill the gaps that antitrust law doesn’t address. There aren't a lot of situations where fewer consumer choices benefit marginalized populations, said Color of Change Senior Campaign Director Brandi Collins-Dexter.