The social media giant Facebook is now facing severe scrutiny for its anti-competitive practices. With the Federal Trade Commission allowing Facebook's competitors to present any complaints against the tech giant, several disgruntled companies such as Snapchat are now presenting a detailed case against Facebook's misdeeds.
Snapchat's legal team had been collecting a dossier against Facebook and has extensively documented several tactics employed by Facebook to prevent Snapchat from thriving. Titled after the antagonist of the famous Harry Potter series, the document is known as the “Project Voldemort.”
Project Voldemort contains several details about the various ways in which Facebook attempted to undermine Snapchat's business through means such as discouraging popular figures and influencers from referencing their Snapchat accounts on Instagram, as stated by people familiar with the issue. Facebook has allegedly prevented any Snapchat content from trending on Instagram.
According to WSJ, sources familiar with Snapchat's Project Voldemort including current Snapchat executives have acknowledged the fact that Instagram was pressuring influencers and forbade them from adding their Snapchat links in their Instagram pages. It was also revealed that Instagram threatened to remove the “verified” status (blue tick mark) if influencers ended up posting Snapchat profile links in their Instagram bio. Also, an update in 2016 prevented Instagram users from permanently adding links to their Snapchat profiles.
Alongside Snapchat, the FTC has contacted several companies, founders and ex-employees of the social media giant to understand how it managed to scale-up from being a social media network for college students to a global social media phenomenon.
According to a senior advisor at Public Knowledge, a consumer group exclusively focusing on tech issues, it was revealed that the FTC was “putting together a picture of what might be a pattern of behavior to prevent competition to the core Facebook business.”
With the FTC contacting the competitors and rivals of Facebook, the social media giant has grown cautious and is now revealed to be heavily investing its time and effort into maintaining and nurturing healthy and friendly relationships with fellow Silicon Valley startups and companies, as said by a person familiar with the company's proceedings.
This hasn't been the first time that the social media giant was under fire and scrutiny for its anti-competitive practices; previously, the House Judiciary Committee had requested Facebook submit its executive communications during the acquisition of Instagram and WhatsApp. During this scrutiny, the House panel spoke to several competitors of the tech giant. However, it is to be noted that the House panel cannot take any enforcement actions against Facebook, while the FTC can.
The FTC is extensively focusing on Facebook's acquisition of an Israeli mobile-analytics startup known as Onavo, which offered a free mobile app with a motto that said: “keep you and your data safe.” Through a virtual private network, Onavo monitored the traffic of its users and gave them an analysis of what sites they viewed the most and so on. While this doesn't sound particularly dubious, a deeper overview of the application sends down a rabbit hole of potential data mishandling.
While the mobile app Onavo offered to analyze the mobile traffic of its users, it, however, redirected the traffic details to Facebook's servers, allowing the tech giant to meticulously track users and provide accurate targeted-advertisements.
Several former employees, as well as the analysis of internal documents, had revealed that Facebook frequently cited the mobile analytics startup Onavo in internal research; but the rising contempt and increasing scrutiny on the tech company's data practices have resulted in the shutting down of Onavo app earlier this year.
Onavo was deemed as a key instrument that allowed Facebook to gauge the popularity of applications, allowing the company to decide on what to acquire next. WhatsApp was acquired after the company monitored the increasing activity through Onavo, which helped Facebook understand the potential of WhatsApp, resulting in a subsequent acquisition later.
Similarly, Facebook observed high mobile traffic to Snapchat but failed to see any content of the messages or images as Snapchat encrypted its traffic as well. It was also known that Facebook at one point tried to acquire Snapchat, but couldn't do so, as the Snap CEO Evan Spiegel declined Facebook's offer.
After Facebook failed to acquire Snapchat, it went on and launched similar features of Snapchat across Instagram and Facebook. With nearly 200 million daily users, Snapchat is behind Facebook in terms of the number of active daily users.
Several Silicon Valley figures such as Paul Keable, chief strategy officer at the dating site Ashley Madison had expressed their contempt towards Facebook for the fact that the company gets to “pick and choose who wins based on their personal whims.”