Facebook reportedly offered to help create rivals to avoid antitrust lawsuits

It may have been willing to create competitors to prevent a legal battle.

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Facebook CEO Mark Zuckerberg stands during a break in testimony before a Senate Judiciary and Commerce Committees joint hearing regarding the company’s use and protection of user data on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Aaron P. Bernstein
REUTERS/Aaron P. Bernstein

Facebook was reportedly willing to go to great lengths to avoid antitrust lawsuits. Washington Post sources claim the company offered to license its code to others, helping them create rival social networks. This would have underscored Facebook’s “commitment to competition,” the Post said.

If so, it clearly didn’t work. According to the insiders, the antitrust investigators decided the code and other proposed concessions weren’t enough to address competitive issues.

We’ve asked Facebook about the licensing claim. A spokesman, Chris Sgro, told the Post that Facebook would “vigorously defend” itself.

The lawsuits from the FTC and 48 states are focused on Facebook’s acquisitions of Instagram and WhatsApp. While both deals received approval in 2012 and 2014 respectively, the internet giant is now accused of using those purchases to stifle competition from rivals. Facebook has called the suits “revisionist history” and pointed to companies like Google, Snap, TikTok and Twitter as proof of fierce competition. It has turned to advertising and other political advocacy in hopes avoiding a regulatory crackdown.

It’s not certain if code licenses would have helped. Alternative social networks have popped up in recent years, sometimes in direct response to Facebook — technical know-how isn’t necessarily the issue. Rather, the concern has usually revolved around the network effect and customer lock-in. It can be tough to leave Facebook or its services when your friends and family are there, and it gets that much harder if you’re using Facebook credentials across services like Instagram and WhatsApp.

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