WASHINGTON: Facebook Inc quickly rejected a call from co-founder Chris Hughes on Thursday to split the world`s largest social media company in three, while lawmakers urged the US Justice Department to launch an antitrust investigation.
Facebook has been under scrutiny from regulators around the world over data sharing practices as well as hate speech and misinformation on its networks. Some US lawmakers have also pushed for action to break up big tech companies as well as federal privacy regulation. "We are a nation with a tradition of reining in monopolies, no matter how well-intentioned the leaders of these companies may be. Mark`s power is unprecedented and un-American," Hughes, a former college roommate of Facebook Chief Executive Mark Zuckerberg, wrote in a lengthy New York Times opinion piece.
Facebook`s social network has more than 2 billion users across the world. It also owns WhatsApp, Messenger and Instagram, each used by more than 1 billion people. Facebook bought Instagram in 2012 and WhatsApp in 2014. Facebook rejected Hughes` call for WhatsApp and Instagram to be made into separate companies, and said the focus should instead be on regulating the internet. Zuckerberg will be in Paris on Friday to meet with French President Emmanuel Macron to discuss internet regulation.
"Facebook accepts that with success comes accountability. But you don’t enforce accountability by calling for the break up of a successful American company," Facebook spokesman Nick Clegg said in a statement. "Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet. That is exactly what Mark Zuckerberg has called for."
US Senator Richard Blumenthal, a Democrat, told CNBC on Thursday he thinks Facebook needs to be broken up and that the Justice Department`s antitrust division needs to begin an investigation. Antitrust law makes such a proposal tough to execute because the government would have to take the company to court and win. It is rare to break up a company but not unheard of, with Standard Oil and AT&T being the two biggest examples.
Hughes co-founded Facebook in 2004 at Harvard with Zuckerberg and Dustin Moskovitz. He left Facebook in 2007, and has said in a LinkedIn post that he made half a billion dollars for his three years of work. "It`s been 15 years since I co-founded Facebook at Harvard, and I haven`t worked at the company in a decade. But I feel a sense of anger and responsibility," Hughes said in the New York Times piece. Hughes also suggested Zuckerberg should be held responsible for privacy and other lapses at the company. "The government must hold Mark accountable. For too long, lawmakers have marvelled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive," he said.
Senator Elizabeth Warren, a Democratic presidential candidate, in March vowed to break up Facebook, Amazon.com Inc and Alphabet Inc`s Google if elected US president to promote competition in the tech sector. "Today’s big tech companies have too much power—over our economy, our society, & our democracy. They’ve bulldozed competition, used our private info for profit, hurt small businesses & stifled innovation. It`s time to #BreakUpBigTech," Warren said on Twitter on Thursday.
Representative Ro Khanna, a California Democrat, said in a statement he agreed in retrospect that US regulators "should not have approved Facebook’s acquisition of Instagram & WhatsApp in 2012." He said that "the way forward is to heavily scrutinize future mergers and to ensure no company has anti-competitive platform privileges."
In one of a number of security and privacy scandals to hit the company, Facebook is accused of inappropriately sharing information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. The company has been in advanced talks with the US Federal Trade Commission to settle a year-old investigation and said last month it expected to spend between $3 billion and $5 billion on a penalty.
On Monday, Republican and Democratic US senators criticized reported plans for the settlement, calling on the FTC to impose harsher penalties and more restrictions on Facebook`s business practices. Hughes said he last met with Zuckerberg in the summer of 2017, several months before the Cambridge Analytica scandal broke. "Mark is a good, kind person. But I`m angry that his focus on growth led him to sacrifice security and civility for clicks," Hughes said. "I`m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them."