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: Regulators face an antitrust dilemma after Meta launches Threads

Threads isn’t the site for “politics or hard news,” said Adam Mosseri, head of Instagram, in a thread, but political concerns could be unavoidable for the Twitter-rival app if Washington regulators challenge the company over antitrust concerns.

Recent Federal Trade Commission efforts against Amazon

and Microsoft

signal Washington isn’t Big Tech’s biggest supporter. As social media users flock from tech giant Elon Musk to tech giant Mark Zuckerberg, Washington regulators are likely taking a close look at Threads and its potential antitrust violations.

The difficulty of deleting a Threads account is one issue that could pose a regulatory challenge for its parent company, Meta
Threads users must sign up for the app through an Instagram account. But if a user deletes their Threads account, their Instagram profile will also be deleted—a policy that wasn’t made clear to users before signing up.

The FTC is focused on making it easy for consumers to cancel subscriptions to companies, so a complicated deletion process could capture the FTC’s attention.

The agency sued Amazon last month for allegedly making it difficult for users to cancel an Amazon Prime subscription.

Amazon said “The FTC’s claims are false on the facts and the law” and “the truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” in an emailed statement to MarketWatch at the time.

The FTC also proposed a “click-to-cancel” provision in March “requiring sellers to make it as easy for consumers to cancel their enrollment as it was to sign up.”

A Threads account doesn’t pose a cost to users, like an Amazon Prime subscription does, but the difficulty of deleting a Threads account could still be on the FTC’s radar as it continues its campaign to make account cancellations easier. 

Additionally, social media users have long been wary of Meta’s data collection policies. When it comes to Threads, “the data component is likely the most concerning on antitrust grounds,” said Krista Brown, senior policy analyst at the American Economic Liberties Project—an antimonopoly advocacy nonprofit.

Threads isn’t available in the European Union due to data-related issues. In the EU, Meta is already under investigation for data privacy violations and is facing regulations on how much user data can be collected and how that data is shared across platforms.

“Threads doesn’t appear to collect more data than Meta’s other services, but the likely worry from European regulators would be the mixing of information collected across those platforms to build advertising profiles,” said Owen Tedford, senior policy analyst at Beacon Policy Advisors, in a note.

In the U.S., where these regulations don’t exist, Meta could use Threads to significantly boost their data collection and mix user information across its platforms.

This would allow them to “build a larger moat or keep down competitors and create greater barriers of entry in all of its businesses,” said Brown of the Economic Liberty Project.

The launch of Threads also adds fuel to the fire of the FTC’s concerns about Meta’s market share of social media users. 

A federal judge allowed a Facebook antitrust claim from the FTC to move forward in 2021. The suit attempts to reverse Facebook’s acquisition of Instagram and WhatsApp, and it remains in progress.

In the judge’s 2021 decision, he wrote the FTC “alleged enough facts to plausibly establish that Facebook exercises monopoly power in the market for [personal social networking] services.” 

The FTC already argued against Meta’s monopoly power and it is power over the social-media market. So, when it comes to threads, the “argument for action would likely focus on the possibility of Meta gaining further market share among social media users,” wrote Tedford of the Beacon Policy Advisors.

Washington is likely looking closely at Meta and Threads, but it is unclear if the new social media platform actually poses an antitrust problem. 

Threads is arguably the first real rival Twitter has faced in its near two-decade history. Meta’s newest endeavor provides a new source of market competition. 

Regulators also will have to determine whether Threads really expands Meta’s market share or if the new platform’s 100 million users are a boost from the app’s integration with Instagram.

Regulators will take time to observe the platforms before bringing any antitrust actions, if at all.

“Any regulatory action against the new app is unlikely to come until next year to allow time for it to settle into the markets and address any of these early issues,” wrote Tedford. But regulators could take on Meta “if these concerns remain unresolved when the calendar turns to 2024.”

Brown didn’t indicate if she thinks the FTC will take any action against Meta, but “the uptick in examples of anti competitive or abusive behavior” from Big Tech companies “will continue to keep attention on that problem,” she said.

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