Facebook Investors Shouldn’t Fear the FTC’s Newest Probe

The world’s biggest social network still has plenty of competitors, and proving it engages in unlawful monopolistic practices will be tough.

The Motley Fool
Jun 10 · 4 min read
IMAGE SOURCE: GETTY IMAGES.

Still plenty of competition

Antitrust violations occur when a company leverages a market-leading position to stifle competitors and gain an unfair advantage. That’s what happened when Microsoft bundled Internet Explorer with Windows to lock out rival web browsers, when Intel subsidized PC makers to use its chips instead of AMD’s, and when Qualcomm lowered its wireless licensing fees for OEMs that bought its mobile chips.

IMAGE SOURCE: GETTY IMAGES.

Social preferences change

Then there’s the fact that social media preferences vary widely by age.

Not the largest digital ad platform

Facebook generates nearly all of its revenue from online ads. The FTC could possibly build an antitrust case against it if it dominated the digital ad market, but it’s not the market leader.

Government has a tough case to prove

It’s important here to not confuse privacy and security issues with antitrust ones. Facebook is certainly guilty of privacy and security gaffes, and it already faces potential fines in Europe for those mistakes. However, it still faces rival social networks in the U.S., and it’s not the top digital ad platform. All this adds up to a tough base for the FTC to build an antitrust case on against this company.


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The MyWallSt Blog

Investing is for everyone, we show you how. MyWallSt is a multi-award winning company that helps you to become a confident and successful investor.