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Tuesday, February 20, 2024

U.S. consumer regulator forms task force to monitor big tech

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The FTC’s Bureau of Competition will put some 17 staff attorneys on the task force, which will consult on tech-related merger reviews, investigations and reviews of consummated tech deals.

“It makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition,” FTC Chairman Joe Simons said in a statement.

The agency’s Bruce Hoffman, head of the Bureau of Competition, did not rule out taking action to undo a consummated deal if anticompetitive behavior was found, but declined to discuss specific transactions.

Unwinding a deal after it has closed is “very rare,” said Henry Su of the law firm Constantine Cannon LLP.

Facebook, already under investigation by the FTC, is accused of violating a 2011 consent decree regarding privacy by allowing the personal information of 87 million users to end up in the hands of Cambridge Analytica, a Britain-based political consulting firm hired by President Donald Trump’s 2016 U.S. election campaign.

Facebook’s shares pared modest gains after the FTC task force announcement, closing down about 0.3 percent at $164.13.

Advocacy groups, such as the Electronic Privacy Information Center, have urged the FTC to require Facebook to unwind its purchases of Instagram, used to share photos, and WhatsApp, a private messaging app.

The App Association, which represents app makers, said it looked forward to the task force’s work.

“A robust, competitive environment allows small businesses to fully participate in this economy, with new opportunities emerging at a rapid pace,” association president Morgan Reed said in a statement.

The Retail Industry Leaders Association, which represents brick and mortar stores whose businesses have been disrupted by online retailers, said creation of the task force will “bring needed scrutiny to the relatively few technology platforms that control a growing share of modern commerce.”

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