Facebook falls on report of possible FTC injunction

Facebook falls on report of possible FTC injunction
By: WNG CNBC Posted On: December 12, 2019 View: 37

Facebook falls on report of possible FTC injunction

Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook's proposed cryptocurrency Libra, how his company will handle false and misleading information by political leaders during the 2020 campaign and how it handles its users’ data and privacy.

Chip Somodevilla | Getty Images News | Getty Images

The Federal Trade Commission is considering seeking a preliminary injunction against Facebook over antitrust concerns, The Wall Street Journal reported Thursday.

Facebook shares fell about 3.5%.

The injunction would likely seek to block Facebook from enforcing policies around how its apps interact with each other and work with potential rivals, sources told the Journal. It could even seek to keep Facebook from pushing forward with its plans to integrate its three messaging services, according to the Journal, in case the agency later attempts to unwind its past acquisitions of Instagram and WhatsApp as a potential remedy.

A majority of the five commissioners, made up of three Republicans and two Democrats, would need to vote to seek the injunction.

A spokesperson for the FTC declined to comment. Facebook did not immediately respond to a request for comment.

Facebook has previously shared its plans to integrate its three messaging apps, Facebook's Messenger, WhatsApp and Instagram, and encrypt all three from end-to-end. Law enforcement officials including Attorney General William Barr have raised concerns with Facebook's plans on the grounds that they could make it harder for investigators to detect instances of child exploitation online and become a safe haven for criminals. Facebook has argued the move would be a positive move for users' overall, providing them greater privacy in their communications, protected even from the company itself.

But an injunction would show that Facebook's plans have also raised antitrust concerns among federal regulators. Lawmakers and experts surfaced some of these questions after Facebook originally announced its plans in January, mostly criticizing the wisdom of allowing Facebook to acquire Instagram and WhatsApp in the first place.

"This is why there should have been far more scrutiny during Facebook's acquisitions of Instagram and WhatsApp which now clearly seem like horizontal mergers that should have triggered antitrust scrutiny," Democratic Rep. Ro Khanna, who represents Silicon Valley, wrote on Twitter at the time.

This story is developing.

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