In brief: The FTC wants to take a new approach by seeking an injunction against Facebook, instead of dragging the company into an investigation that could take years to produce any effects. If the five members vote in favor of such a move, the social giant may face major roadblocks in its overall strategy as soon as next month.
Back in March, Facebook CEO Mark Zuckerberg outlined the company's plans for a privacy-focused future, which among other things includes operating Facebook, Messenger, WhatsApp, and Instagram on the same infrastructure.
Zuckerberg explained at the time that work was already underway to stitch together the social giant's online properties, and that in doing so, the apps would work faster and feature the long-promised end-to-end encryption that would make interactions more private.
The problem with that plan is that Facebook is under intense regulatory scrutiny right now because of its many privacy and antitrust violations in the recent past. According to a new report from the Wall Street Journal, the FTC is currently looking to file an injunction against the company that could hit pause on its current ambitions.
Specifically, the FTC believes the way Facebook wants to implement the integration between its apps violates the current antitrust law and that action should be taken as soon as possible to block these efforts. And this could easily pave the way for regulators to break up the company.
According to leaked internal emails, Zuckerberg sees this as an existential threat and is somewhat confident that fighting such a decision in court would be successful, even if it would take a lot of time and energy to do so.
The decision to seek an injunction depends on a majority vote from the five FTC members. And if that goes well, the Commission could also work on blocking Facebook's from leveraging its controversial data policies to thwart potential rivals.
In any case, things would move much faster than if the FTC were to go the traditional route with an antitrust probe, which could take years. By comparison, the injunction could happen as soon as next month, even before the DOJ is able to move on with their own battle against Facebook.
When the FTC levied a $5 billion dollar fine at the company, its valuation rose by almost $10 billion as a result. A New York Times piece by Matt Philips does a great job of outlining how investors have propelled Big Tech to new financial heights despite a sharp increase in fines, a politically-driven trade war, and ever-increasing regulatory scrutiny.
This time, however, Facebook's stock took a 3 percent dive on the news, so it will be interesting to see how it'll look if the proposed injunction comes into effect. The FTC has been criticized a lot as of late for the fact that its fines do little to affect the bottom lines of companies that are punished, but this new move seems much more likely to cause positive change in how Facebook operates.