Facebook backed down on Houseparty acquisition due to antitrust scrutiny

Facebook had planned to gobble up even more of the social media market.

After being slapped with hefty fines and numerous antitrust allegations, tech giant Facebook seems to be developing a new approach towards tackling the rising antitrust issues.

“The combination of Facebook, Instagram and WhatsApp into the single largest communications platform in history is a clear attempt to evade effective antitrust enforcement by making it harder for the company to be broken up. We need to hit the pause button,” said David Cicilline, the chairman of the House Antitrust subcommittee.

Facebook is taking new initiatives to make itself immune from any potential legal troubles. For instance, Facebook had started integrating the messaging platforms of WhatsApp, Instagram, and Messenger for showcasing Facebook as a unified platform.

The company got into acquisition talks with a social media network known as Houseparty. According to the New York Times and two people close to the discussions, it was revealed that the tech giant hit pause to the acquisition owing to the on-going antitrust investigations.

Houseparty was eventually acquired by Epic Games.

Similarly, the executives at Facebook are working towards rebranding both Instagram and WhatsApp to strengthen their association with Facebook. This shift is sparking a debate on whether Facebook’s efforts to unify the companies and rebrand them as a single entity is a smart business move or a step that can help in strengthening anticompetitive practices.

The company’s founder and CEO Mark Zuckerberg don’t seem to be ready to lose Instagram and WhatsApp, both of which can help the company fuel its profits.

While a few prominent antitrust activists and officials have expressed that the tech giant is simply trying to evade antitrust charges, others have expressed that this decision is logically justified according to the company’s business dynamics.

Facebook said that the new changes to the messaging system were done to improve user-friendliness.

Building more ways for people to communicate through our messaging apps has always been about creating benefits for people — plain and simple. People want to be able to reach as many people as they can with the messaging app they choose,” said Stan Chudnovosky.

Looking behind, it was apparent that the tech giant was working towards becoming immune from antitrust issues from June 2018 itself.

Naga Pramod

Naga Pramod is a computer science major and tech news reporter with a passion for cyber security, networking, and data science. [email protected]