WASHINGTON—Federal officials are considering seeking a preliminary injunction against Facebook Inc. over antitrust concerns related to how its products interact, according to people familiar with the matter.
If it materializes, the action by the Federal Trade Commission would focus on Facebook’s policies concerning it how it integrates its apps or allows them to work with potential rivals, these people said. Alongside its core social network, Facebook’s key products also include Instagram, Messenger and WhatsApp.
The potential FTC action would likely seek to block Facebook from enforcing those policies on grounds that they are anticompetitive, the people said. An injunction could seek to bar Facebook from further integrating apps that federal regulators might look to unwind as part of a potential future breakup of the company, one of the people said.
A majority of the five-member FTC would be needed to seek an injunction, which the commission would need to file suit in federal court to obtain. The FTC declined to comment.
Facebook declined to comment. The social-media giant has worried for months that the FTC would seek an injunction against what are known as its “interoperability” rules, one of the people familiar with the matter said. Interoperability refers to the manner in which digital platforms interact.
Share Your Thoughts
Has Facebook created a monopoly for messaging apps? Why or why not? Join the conversation below.
Concern that Facebook’s interoperability policies curb other services’ ability to compete would underlie a potential FTC action, these people said. Facebook has rejected that recurring complaint about its practices.
The social-media giant has confronted mounting scrutiny from regulators and lawmakers over its business practices and products. Related reading:
Officials also worry that some of Facebook’s plans to further integrate its own major products could make it harder to eventually split up the company in an antitrust case, according to one of the people.
It isn’t known whether the FTC will move forward with an antitrust action against Facebook or seek an injunction over its interoperability policies. If the agency takes either step, its action could occur as soon as next month, according to one person familiar with the matter. It is also possible that the FTC could attempt to block certain Facebook interoperability policies that critics say have disadvantaged social-media rivals in the past.
Facebook said in January that it was considering closer interoperability of messaging across its main platforms. But the company has said its recent plans to increase interoperability are aimed at improving users’ experiences, particularly in light of recent controversies over privacy on Facebook, and not to freeze out competitors or fend off regulatory action.
“There are privacy and security advantages to interoperability,” Facebook CEO Mark Zuckerberg wrote in a Facebook post in March. “With the ability to message across our services…you’d be able to send an encrypted message to someone’s phone number in WhatsApp from Messenger.”
Messaging networks are gaining in popularity, particularly among younger users, and becoming more important to Facebook’s business. The company hopes to update its platforms to address that trend.
Columbia University law professor Tim Wu, a former senior adviser for the FTC, said seeking a preliminary injunction could hold strategic benefits for the commission.
“The advantages are that it gets things moving, and sort of forces things to a judicial decision very quickly,” Mr. Wu said, “as opposed to having an antitrust investigation going for five years…The burdens of proof can be higher for the government, but if they’ve got a good case it can be advantageous.”
Mr. Wu is among a group of Facebook critics who see the company’s pursuit of closer integration as concealing anticompetitive motives. They have argued to the FTC that it should seek an injunction blocking the company’s plans for further interoperability.
“One anticipated (and possibly intended) effect of the integration is to make divestiture more difficult,” read a slide in a deck reviewed by The Wall Street Journal that Facebook critics presented to antitrust regulators last summer. “A preliminary injunction may be necessary or desirable to prevent this merger and maintain the status quo.” The slide deck’s authors include Mr. Wu and New York University law professor Scott Hemphill.
Moving swiftly toward litigation over interoperability also could allow the FTC to take enforcement action ahead of the Justice Department. The two agencies share federal antitrust-enforcement authority, and occasionally are rivals. Both agencies are known to be looking into possible antitrust issues involving Facebook.
An FTC antitrust lawsuit against Facebook could become federal enforcers’ opening salvo against big tech companies as they look into similar concerns involving Alphabet Inc. ’s Google unit as well as Amazon.com Inc. State attorneys general also are investigating Facebook and Google.
The FTC has been examining Facebook’s acquisitions as a central part of its antitrust inquiry into the company, seeking to determine whether they were part of a campaign to consume potential rivals and head off competitive threats, the Journal reported in August. Facebook has acquired about 90 companies over the last 15 years, according to data compiled by S&P Global, including Instagram and WhatsApp.
In congressional testimony earlier this year, Matt Perault, then director of public policy at Facebook, told a House antitrust subcommittee that the company’s acquisitions have fueled innovation and brought together firms of complementary strengths
Companies purchased by Facebook “have had more opportunity to innovate as part of Facebook than they would have on their own—enhancing users’ experience and resulting in more choice for more people overall, not less,” Mr. Perault said.
—Deepa Seetharaman contributed to this article.
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8