Facebook has made an offer to supply its code to competitors under license. This makes it easier for them to start a social network themselves to compete with Facebook. The offer was declined by the US trade regulator.
Facebook was taken to court in the United States this month by 46 states and the trade regulator FTC. Facebook, WhatsApp and Instagram are three very large social networks, and the fact that these three platforms are under one company makes it difficult for other players to compete, the prosecutors say. In addition, the FTC is also investigating Facebook’s plans to integrate its services.
The Washington Post now says Facebook has shown its willingness to the FTC to change its business model to avoid prosecution. The company wanted to license its important code to competitors. That way, they could easily launch their own social network according to Facebook’s recipe.
The FTC eventually turned down Facebook’s offer, and then filed a lawsuit. It is not clear what such a Facebook licensing system would have looked like for competitors. It is therefore not certain whether other social networks could have competed with Facebook in such a realistic way, but the proposal was in any case insufficient for the trade commission to forget the concerns about Facebook’s powerful position.
It is not surprising that Facebook at all costs wants to avoid this grand 46-block courtroom and the FTC wants to avoid, because there is a lot at stake for CEO Mark Zuckerberg’s company. The indictment states that the ultimate goal is to separate Facebook’s various social networks from each other in order to stimulate competition. This means that Facebook may be forced to sell WhatsApp and Instagram to another party. It remains to be seen whether it will actually get that far.