SAN FRANCISCO – Facebook disclosed on Wednesday that it was the target of an antitrust investigation by the Federal Trade Commission, just hours after the agency unveiled a privacy settlement with the company, underlining the steady stream of actions that regulators are taking to limit the power of America's tech giants.
The company revealed the investigation in its quarterly earnings announcement, saying the FTC had informed him last month of the move. While the F.T.C. it was known to be looking into Facebook and whether it had used its reach and clout to reduce competition, an antitrust investigation has begun a more formal and intensive phase of screening
The twin developments nevertheless highlighted the new reality for big tech companies
Over the past 10 days alone, Facebook, Google, Amazon and Apple have all faced grilling from Congress and questions from regulators. Last week, executives from the companies attended a House hearing on antitrust matters. Google has also appeared on a separate hearing on censorship and Facebook has testified on Capitol Hill about a new cryptocurrency initiative. This week, the Justice Department said it would launch an antitrust review into how internet giants had amassed market power and whether they had acted to reduce competition
"The online technology industry and our company have received increased regulatory scrutiny in the past quarter, "Facebook said in a statement on Wednesday.
Earlier in the day, Mark Zuckerberg, Facebook's chief executive, said he supported settlement privacy with the FTC
" We're going to change the way that we operate, across the whole company. From leadership down to the ground, "he told employees at a meeting at the company's headquarters in Silicon Valley. "If we do not, then we are going to be held accountable for it."
A spokeswoman for the F.T.C.
Andrew I. Gavil, a law professor at Howard University, said F.T.C's investigation was a commitment to staff and agency resources. "The FTC's lengthy privacy inquiry into Facebook could well have brought evidence that helped persuade the agency to pursue an antitrust investigation," he said.
said Mr. Gavil, and former senior F.T.C. official
Investigations can take months or even years. They result in staff presentations, made by the agency's economic bureau and by its competition bureau, made in private to the five commissioners. The politically appointed commissioners then decide whether to bring a case or not, or try to reach a settlement.
Unlike the privacy case, there is no provision for fines in a civil antitrust case. But what can happen, if a corporate defendant is found to have violated the nation's antitrust law, is follow-on cases by private plaintiffs such as other companies
For now, the activity of the authorities has done little to squeeze Facebook's business . The company said on Wednesday that revenue for its second quarter rose 28 percent from a year ago to $ 16.9 billion. Profits fell 49 percent to $ 2.6 billion as Facebook took a one-time $ 2 billion charge to pay the FTC's fine and recorded a tax charge related to tax deductions, but excluding those that were still performing better than Wall Street had expected. 19659002] This is a developing story and will be updated