For most of the past decade, the Silicon Valley's 800-pound gorilla was crushing rivals, tossing out their best ideas or buying them straight as they claimed dominance your on social media.
Now the knives are coming out.
A number of current and former Facebook competitors talk about the firm's firm tactics toward investigators with the Federal Trade Commission as part of its broader antitrust investigation of the media giant's social business practices, according to people familiar with the matter.
One of them is
where the legal team for years kept track of ways Facebook was trying to thwart competition from the upstairs, according to people familiar with the matter. Document title: Project Voldemort.
The Voldemort files, a reference to the fictional antagonist in popular Harry Potter children's books, chronicles Facebook moves that threaten to undermine Snap's business, including discouraging popular account holders or influencers from referring to Snap in their accounts. Instagram, according to people familiar with the project.
In recent months, the FTC has contacted dozens of technical executives and application developers, said people familiar with the subject matter. According to people familiar with the conversations.
The discussions focused on growth tactics at any cost that powered Facebook from a social network for students 15 years ago to a collection of services now used by more than one in four people in the world every day.
Negotiations show that the FTC is "drawing a picture of what behaviors can be to prevent competition from Facebook's core business," says Gene Kimmelman, senior advisor at Public Knowledge, a consumer focus group technical issues, which served as an employee of the Department of Justice's antitrust ministry in the Obama administration.
Inside Facebook, senior executives are concerned about rivals being able to disclose harmful information to federal employees and have discussed ways to improve company relations around Silicon Valley, according to someone familiar with the discussions.
The FTC investigation is one of several antitrust studies on Facebook and major tech giants in the US and around the world. Earlier this month, the House Judiciary Committee asked for executive messages on Facebook about the company's decisions to buy the Instagram photo and video sharing network in 2012 and the WhatsApp messaging app in 2014. Lawmakers contacted several from the rivals of these companies as part of it. probe, the newspaper reported earlier.
The House Panel cannot take enforcement action against companies. However, the FTC can.
One area of focus for the FTC is Onavo, an Israeli startup mobile analyst that Facebook purchased in 2013. Onavo offered a free mobile app that described itself as a way to "protect you and your data" by creating a virtual private network . To do this, the company redirected Internet traffic from Onavo to Facebook servers, which allowed it to register each action in a central database.
This has allowed Facebook to quietly track what users on their phones are doing, including what apps they use and how long reports are reporting in 2017. Onavo data is often cited in internal research and strategic surveys, according to former employees and internal documents and helped inform Facebook of the $ 22 billion acquisition of WhatsApp in 2014. Facebook closed the Onavo app earlier this year amid increasing scrutiny of its data collection practices.
Snap was founded in 2011, when Facebook was already the dominant player in social media. It quickly became a hit on social media after the Snapchat messaging app took off among young people. At one point, Facebook – via Onavo – was able to see Snap data as specific as the number of messages sent by the user or how long these users spent in specific Snapchat features, former employees said. Facebook could not see the content of the messages or images. Snap usage visibility decreases significantly after Snap encrypts its application traffic.
A Facebook spokesman said the app is similar to other market research tools in the industry.
Another focus of the investigation is whether Facebook's chairman and CEO
acquired or tried to buy startups that they feared would later become competitors, according to people familiar with the investigation. In some cases, after the overtures have been downloaded on Facebook, the social media giant is copying features of previous targets.
For example, when Mr. Zuckerberg met with the creators of startups, including Evan Spiegel, CEO of Snap, and
co-founder of Foursquare Inc., he presented them with two scenarios: they either accept the price he offers for their companies, or face Facebook's efforts to copy their products and make it difficult for people familiar with the matter. In both cases, after the companies rejected the overtures, Facebook shortly after launching features that mimic Snap and Foursquare products.
In 2014, Foursquare began moving from a consumer-oriented application to providing location-based technology and business data.
Facebook introduced a series of products similar to the most popular Snap features, including stories, filters and stickers. Snap's growth has declined from time to time, in part due to competition from Instagram, and now has about 200 million daily users, less than 15% of Facebook's total. After a rock patch in 2018, due in part to a botched redesign, Snap is again adding users and its stock is restored. Snap has also attracted more young users between the ages of 13 and 34 in the US than Facebook and Instagram.
A Facebook spokesman said users were given more choice when two companies offered similar services and features.
"This is workplace competition and one of the longstanding hallmarks of the technology sector," she said. "Businesses are constantly building and repeating concepts and ideas on the market – making them better or taking them in different directions. This is useful for users. "
Externally, Snap often handles the tension with humor. After Snap released region-specific filters, in 2014, it created one that only appeared for Snap users on Facebook. The filter showed an image of the Snap ghost logo laughing, pointing to a user who is probably a Facebook employee.
A major disappointment point for Snap executives was the belief that Facebook prevented Snap's most popular content from flowing on Instagram, which they viewed as an abuse of monopoly power. When users upload videos and images of the most popular Snap lenses to Instagram – such as people vomiting and wearing bunny ears – users also often include the hashtag #snapchat and the name of the lens.
In Project Voldemort documents, according to people familiar with them, Snap executives noted their belief that Instagram was blocking the search for these Snap terms and did not include this content on Instagram's "research" page, where users discover new content.
Instagram reps also started pushing influencers to stop adding Snapchat links to their Instagram profile pages, according to people familiar with the matter.
Instagram representatives suggested to some influencers that they could cancel a "verified" status for users, meaning that the account was legitimate and popular, according to someone familiar with the discussions.
The loss of the blue check mark that comes with the fied check can undermine the influence of the influence to guarantee paid trades, which can range from hundreds to millions of dollars depending on the popularity of the influence.
In 2016, Instagram added a rule that prevents users from adding links to their Snapchat accounts.
Facebook tactics have long been a concern in Silicon Valley, said Paul Kibble, chief strategy officer at Ashley Madison. A dating site that takes care of married people looking for deals is blocked by an ad on Facebook that now has its own dating feature.
"Facebook has created a scenario where they can choose and choose who wins based on their personal whims. said Mr. Cybell. "All while managing their own competitive products."
Cybell said he hopes to work with Facebook to improve his relationship with the dating industry. He said he had no contact with regulators but would provide information if asked.
– Emily Glazer and John D. McKinnon contributed to this article.
Write to Georgia Wells at Georgia.Wells@wsj.com and Diego Setharaman at Deepa.Seetharaman@wsj.com
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