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CMA refuses to rule out move to break up Facebook and Instagram

The UK’s Competition and Markets Authority (CMA) has refused to rule out a move to break up Facebook and Instagram, amid rising concerns over the social media empire’s market dominance.

The CMA revealed in a report this week that it hopes less drastic measures, such as making platforms more interoperable, will successfully address concerns about Facebook’s position in the social media sector.

But the authority noted that if such measures fail, it may back a move to break up the two platforms. “A forced separation of Facebook and Instagram would clearly be a significant step to take, and it would require careful consideration,” the report states.

“If other measures, such as the interoperability measures discussed in […] this [report], are not successfully implemented, then it may be necessary to consider separation of and Instagram.”

The CMA launched its initial investigation into Facebook, Google and competition in the online advertising market earlier this year. It came after the US economist Jason Furman led a review which concluded that British competition laws should be strengthened, to crackdown on “the bullying tactics” of US tech giants.

But speaking at the time, Furman said he was not in favour of breaking up the tech giants. “I don’t think there’s any reason that we need to do that,” he told reporters. “Our approach is all about preserving the good, avoiding large unintended consequences while getting more of that potential and trying to strike that balance was the whole goal here.”

The CMA’s probe found that Facebook “faces limited competitive threat due to the strong network effects that it enjoys” and warned that even if it was separated from Instagram, the market could “eventually [tip] back to one supplier”.

“However, users would at least enjoy the benefits of competition in the meantime, and other remedies such as interoperability measures could be brought into force to reduce the risk, and adverse consequences, of tipping,” the regulator stated.

The European Commission also signalled last month that it may take “prescriptive measures” to boost competition in the sector, amid fears that existing measures are failing.

A Facebook spokesperson told NS Tech: “We are fully committed to engaging in the consultation process around the CMA’s preliminary report, and continuing to deliver the benefits of technology and relevant advertising to the millions of people and small businesses in the UK who use our services.

“We agree with the CMA that people should have control over their data and transparency around how it is used. In fact, for every ad we show, we give people the option to find out why they are seeing that ad and an option to turn off ads from that advertiser entirely.  We also provide industry-leading tools to help people control their data, like “Off Facebook Activity”, and to transfer it to other services through our Data Transfer tools. We look forward to further engagement with the CMA on these topics.”

How the CMA intends to tackle Facebook and Google’s dominance