Facebook Shares Continue to Slide on FTC Injunction | Financial Buzz

Facebook Shares Continue to Slide on FTC Injunction

The Federal Trade Commission is considering seeking a preliminary injunction against Facebook (NASDAQ: FB) over antitrust concerns, The Wall Street Journal first reported on Thursday. 

Following the report, Facebook shares slid by 2.7% at the close on Thursday, but shares continued to decline by 1.25% on Friday morning.

The injunction would most likely seek to block Facebook from enforcing policies around how its apps interact with one another and work with potential competitors, the Journal said. Additionally, the injunction could also seek to keep Facebook from merging its three social platforms, Instagram and WhatsApp. 

Facebook previously shared plans to merge the three apps and encrypt all three from end-to-end. However, lawmakers and the public were concerned that it could possibly further the dangers of online abuse, making it harder for investigators to detect instances of child exploitation and make it a safe haven for criminals, said Attorney General William Barr.

On the other hand, Facebook argued that merging the three would be overall beneficial for users, providing them with greater privacy in their communications and even protecting themselves from Facebook itself. 

CNBC reported that a source told the Journal that the FTC would seek an injunction on the grounds “interoperability” rules that govern how digital platforms interact with one another based on concerns that Facebook’s policies limit other services’ ability to compete. 

Consequently, the FTC will either have to decide to drop the case or reach a settlement with Facebook or bring an antitrust case to court.