FTC Considering Deposing Top Facebook Executives in Antitrust Probe--5th Update

By Brent Kendall and Emily Glazer 

The Federal Trade Commission is considering taking sworn testimony from Facebook Inc. Chief Executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg as part of its investigation into whether the social-media giant has violated U.S. antitrust laws, according to people familiar with the matter.

Top Facebook officials are preparing for potential depositions and some are worried about the possibility, a person familiar with the matter said. However, the company now is most immediately planning for Mr. Zuckerberg's scheduled July 27 appearance before the House Judiciary antitrust subcommittee, where he and other top tech executives are expected to be grilled by lawmakers.

The executives weren't deposed in the FTC's prior probe of Facebook for alleged consumer-privacy violations, a matter that resulted in a $5 billion settlement a year ago. FTC officials in announcing that agreement said they floated the possibility of deposing Mr. Zuckerberg as one way of extracting a bigger settlement from the company.

An FTC spokeswoman declined to comment.

A Facebook spokesman said the company has continued to demonstrate to enforcement agencies that its "innovation provides more choices for consumers." The spokesman added that Facebook looks forward to sharing its views about the competitive landscape alongside other technology leaders later this month at the congressional hearing.

Facebook is one of a handful of tech giants in the government's crosshairs amid concerns they are too powerful and stifle competition.

Facebook-owned platforms, including Instagram and WhatsApp, have more than 2.5 billion users world-wide, and the company has emerged as one of the few dominant players in the U.S. digital advertising market.

The FTC has been examining whether Facebook has engaged in unlawful monopolistic practices, including whether it had a strategy of buying up potential rivals for the purpose of heading off future competitive threats.

The Justice Department also is taking a broad look at dominant online platforms over antitrust concerns, creating friction between the two agencies, The Wall Street Journal has reported. But the department for now has been more focused on Alphabet Inc.'s Google, people familiar with the matter said. The Journal reported in May that Justice Department was preparing to sue Google as soon as this summer.

Most state attorneys general also are investigating Facebook for possible antitrust violations. While the states communicate with their federal counterparts, they are not running a joint probe.

Antitrust investigations involving conduct by a dominant firm can be complex and slow moving, but antitrust officials are facing time pressures, especially with the election looming in November. If the probes drag on past then, they could end up being run by different political leadership.

Facebook, similar to other large companies, in the past has tried to settle government concerns without litigation, one of the people familiar with the matter said.

There are no active settlement talks with the FTC on antitrust matters now, the person added.

Facebook is increasingly preparing for the possibility that the government may seek to limit how its products and platforms interact or force the company to divest parts of its business -- and is ready to litigate those points, people familiar with the matter said.

Mr. Zuckerberg's next big test comes when he appears before the House antitrust subcommittee later this month along with the chief executives from Amazon.com Inc., Apple Inc. and Google.

Lawmakers, who have sought documents and testimony from all four firms, are examining whether U.S. antitrust laws need to be updated to curb what some on Capitol Hill perceive as excessive power wielded by tech giants over the digital marketplace, such as online advertising, e-commerce and smartphone apps. It is common for them to also ask about other matters, which has factored into Facebook's preparations ahead of the hearing.

Write to Brent Kendall at [e-mail] and Emily Glazer at [e-mail]

(END) Dow Jones Newswires

July 17, 2020 18:12 ET (22:12 GMT)

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