Cruelty, thy name is Wednesday, for Facebook anyway.
The Wall Street Journal reported Wednesday that the U.S. Federal Trade Commission is preparing for a potential antitrust case against
(ticker: FB) by the end of the year. Citing anonymous sources, the Journal reported that the government was considering challenging the social network on its dominant position in the social media industry, though the FTC has not yet determined whether it will go through with a lawsuit.
Shares of Facebook dropped about 3% to $264.31 in afternoon trading.
The FTC’s potential lawsuit arrives amid growing effort among regulators and lawmakers to closely scrutinize the activities of some of the largest tech companies in the U.S., and determine whether they have violated antitrust laws. The Journal has previously reported that the FTC has taken testimony from CEO Mark Zuckerberg but could not determine what legal theories federal lawyers were pursuing the case under.
The FTC fined Facebook $5 billion in 2019 related to the company’s privacy issues, after the company improperly handled data of millions of users, resulting in the Cambridge Analytica scandal in 2018. As Barron’s has noted previously, Facebook stock has thus far been imperious to such scandals, and have recently written positively about the stock after a coalition of civil rights groups organized an advertising boycott in July.
The campaign, called Stop Hate For Profit, was put together by groups such as Color of Change and the Anti-Defamation League. Following the ad boycott, the coalition of groups has continued to pressure Facebook to do more to combat hate speech, misinformation, and voter suppression on the platform.
As part of the campaign, a group of celebrities including Kim Kardashian West said that they were going to stop posting to social media accounts on properties owned by Facebook. The protest is part of the group’s so-called week of action, and includes posting social media messages about the issues involved and the pause on posting Wednesday.
Facebook stock has gained almost 30% this year, as the
index rose 5.6%.
Write to Max A. Cherney at firstname.lastname@example.org