On Friday, The New York Times reported that Mark Zuckerberg is planning to integrate the underlying infrastructure of Facebook Messenger, Instagram, and WhatsApp, allowing users to message each other between apps. At its face, this move could bring some serious advantages for consumers, but lawmakers, regulators, and security experts are already beginning to question whether the benefits outweigh the consequences.
“Good for encryption but bad for competition and privacy,” Sen. Brian Schatz (D-HI), the ranking member of the commerce subcommittee’s panel on technology, tweeted yesterday.
“Once again, Mark Zuckerberg appears eager to breach his commitments in favor of consolidating control over people and their data,” Sen. Richard Blumenthal (D-CT) said in a statement to The Verge.
Facebook is the largest social media network by far, with over 2 billion users across properties and roughly 1.5 billion users who log into at least one of the services every day. In 2011, the Federal Trade Commission first knocked Facebook, saying that the company deceived users into believing they could keep their information private, telling users they could privately post content, when in some cases, their friends lists, posts, and statuses were all public. But after over 70 acquisitions, the Department of Justice has never moved to stop Facebook from acquiring a company.
A majority of those acquisitions were US-based companies, many of them founded in close proximity to the Facebook campus. The products those companies made were often shut down after the acquisition, and the former employees were brought in to work on Facebook’s own endeavors, at times swallowing much of Silicon Valley’s talent and what could have been competing products.
“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,” Rep. Ro Khanna (D-CA), a lawmaker who represents much of Silicon Valley, said on Friday. “Imagine how different the world would be if Facebook had to compete with Instagram and WhatsApp. That would have encouraged real competition that would have promoted privacy and benefited consumers.”
Last year, lawmakers and regulators focused primarily on the fallout of the Cambridge Analytica scandal, which resulted in over 87 million Facebook users being deceived into handing over a huge trove of their personal data. The European Union implemented its own set of data privacy rules last spring as part of a larger data initiative, but Facebook has only been met with relatively meager fines.
That could change this year. Congressional leaders have made significant steps to rein in tech giants, and they are beginning to question the market power of companies like Facebook and Google. Just this month, the new Senate Judiciary chairman, Sen. Lindsey Graham (R-SC), said he would like to hold more hearings involving the tech sector, comparing Silicon Valley to the “Wild West.”
Blumenthal, a member of the powerful Judiciary Committee, took a similar line in a statement to The Verge, “Facebook and Google’s dominance over data has already harmed consumers and the economy. The FTC and the Department of Justice must take Big Tech’s invasive, anticompetitive practices seriously and begin to vigorously enforce our laws.”
President Trump’s nominee to lead the Justice Department, William Barr, has said he’d like the agency to play a bigger role, suggesting he would reevaluate how resources in departments like the antitrust division were prioritizing tech.
If Facebook were to come under real scrutiny by antitrust regulators, Instagram and WhatsApp would likely be their first two targets. By 2020, the messaging merger between Facebook’s top properties will likely be complete, making it even more difficult for them to be torn apart by regulators in the future. No longer could officials make the argument that they could easily be spun back off into their own companies.
Last November, President Trump told Axios that the federal government was actively studying whether companies like Facebook, Amazon, and Google had violated antitrust law. Trump’s own antitrust head, Makan Delrahim, has repeatedly said that these anti-competitive concerns are valid, but he was unsure whether there is enough economic evidence to prompt penalties or even break-ups just yet.
If the FTC or the Justice Department were to pursue a breakup, they couldn’t simply make the argument that Facebook was too big. Antitrust laws like the Sherman Act don’t call for breakups just because a company is big and powerful. But, if the government found that Facebook had stifled competition in a way that harmed consumers, the department could potentially pursue criminal action that would result in breaking Facebook up.
On Thursday, advocacy groups like Color of Change and the Open Markets Institute called on the FTC to reestablish WhatsApp and Instagram as independent companies, not because it has broken antitrust laws, but because “Facebook breached its commitments to the Commission regarding the protection of WhatsApp user data,” they said. As a consequence, the groups requested that the FTC penalize the breach of an agreement with a breakup.
Security experts have also raised concerns that merging the services could weaken WhatsApp’s end-to-end encryption. As of right now, WhatsApp is the only real messaging service that offers default encryption. In order to allow cross-messaging, it’s unclear whether WhatsApp’s encryption could be weakened to better allow interoperability.
The real question is: does this mean that the encryption on all three services will get upgraded to the quality of WhatsApp? Or will WhatsApp’s encryption be downgraded to allow compatibility? The latter would be a huge risk. 4/
— Matthew Green (@matthew_d_green) January 25, 2019
“When it comes to privacy, we can no longer give Facebook the benefit of the doubt,” Sen. Ed Markey (D-MA) said in a statement Friday. “Now that Facebook plans to integrate its messaging services, we need more than mere assurances from the company that this move will not come at the expense of users’ data privacy and security.
“We cannot allow platform integration to become privacy disintegration.”