FTC Chief Says Breaking Up Big Tech Is On The Table

Federal Trade Commission building

The chief of the U.S. Federal Trade Commission (FTC) said he’d he’d be willing to break up tech companies if necessary, according to a report by Bloomberg.

The FTC is currently investigating whether Facebook and other large tech companies are harming competition by buying smaller tech companies and merging with them. FTC Chairman Joe Simons said he knows breaking up the companies would be challenging, but he would do it if it was the right way to bring back a healthy level of competition.

“If you have to, you do it,” Simons said. “It’s not ideal because it’s very messy. But if you have to you have to.”

Simons is leading a team to look at how the industry conducts itself, and to see if the mergers were anticompetitive. The company’s current investigation is into whether Facebook intentionally tried to thwart competition.

In 2012, Facebook bought Instagram, and in 2014 it bought messaging service WhatsApp, and the FTC approved both acquisitions. Many critics and politicians, including presidential candidate Sen. Elizabeth Warren, have called for the breaking up of companies to allow for more competition.

Warren said large companies are “using mergers to limit competition” by purchasing competitors. She cited the Facebook/Instagram, Google/Waze and Amazon/Diapers.com acquisitions as examples. 

In order to undo the mergers, Simons said, the FTC could say “we made a mistake,” and then a court would need to approve the decision. 

In July, the FTC announced a broad probe into Facebook that would include looking into social media, mobile applications and digital advertising practices. It will also look at what would’ve happened to a company like Instagram if it wasn’t acquired by Facebook.

“There’s a question about what caused Instagram to be as successful as it is,” Simons said. “Was it the fact that the seed was already there and it was going to be germinated no matter what or was the seed germinated because Facebook acquired it?”