FTC Reportedly Considers Injunction Against Facebook—And Its Stock Slides

Topline: The Federal Trade Commission is considering seeking a preliminary injunction that could scuttle a plan to merge Facebook’s apps—including Instagram and WhatsApp—under one network, both the Wall Street Journal and the New York Times reported Thursday. 

• The action would target Facebook’s plan to integrate the technical back-end infrastructure of Facebook, Instagram and WhatsApp.
• In practice, Facebook has previously said it wants users to be able to send and receive messages across any of its apps. A user would be able to send a Instagram direct message via Facebook’s Messenger app, for example.
• Critics say that full integration would make it harder for Facebook to fully divest from Instagram and WhatsApp if the FTC decided to break up the company. CEO Mark Zuckerberg has touted increased privacy, security and convenience as reasons for integrating apps.
• Facebook shares were down 2.5% following the Wall Street Journal’s report. 
• Facebook did not immediately respond to a request for comment from Forbes. 

Key background: Facebook is in the crosshairs of antitrust regulators who may reevaluate the company’s acquisitions of Instagram and WhatsApp, which were previously approved by the government. The FTC, Justice Department and state attorneys general from nearly every state are investigating the social media giant for its dominance in the social media market, scrutinizing how Facebook has boxed out rivals over the last decade.

What’s next: A majority of the five-person FTC would have to approve of an injunction if the agency decides to move forward, and a court would still have to sign off before it could be enforced. The Wall Street Journal reported the FTC could make a decision as soon as next month.