Facebook’s Zuckerberg Tries to Defend Against Big Tech Antitrust Backlash

Mark Zuckerberg

The past few days have been a particularly difficult one for large tech companies. With leaked evidence suggesting that tech giants like Google (NASDAQ: GOOG) are playing a larger role in filtering and slanting the data that their users receive, new cries for breaking up these businesses are emerging both in Washington as well as with regular people.

While Facebook wasn’t mentioned particularly, the social media giant has had a chronic problem in regards to how it handles its user’s private information, so it’s natural that Facebook has been lumped into this situation as well.

With a number of political officials investigating the involvement of large tech companies in manipulating information, Facebook’s CEO Mark Zuckerberg went on to defend the idea of big tech, arguing that breaking up these companies won’t solve the underlying problem.

“The question that I think we have to grapple with is that breaking up these companies wouldn’t make any of those problems better,” said Zuckerberg in a conversation with Harvard law professor Cass Sunstein. “The amount that we’re investing in safety and security is greater than the whole revenue of our company was earlier this decade when we went public, so it just would not have been possible to do the things we’re doing at a smaller scale.”

With Facebook’s controversial history regarding how it uses its user’s data, it’s not surprising that many disagree with Zuckerberg’s opinion. Just recently, the House Judiciary committee said earlier in the month they were beginning a “top-to-bottom” antitrust investigation where big tech companies, including Facebook, Google, Apple (NASDAQ: APPL) and even Amazon (NASDAQ: AMZN) would be thoroughly investigated.

Facebook was recently kicked out of the S&P 500 Ethics Index, a further blow to the company’s already damaged reputation. Worries about how Facebook has been handling its user’s private information have dogged the company for years, with co-founder Chris Hughes arguing in an article featured in The New York Times that Facebook should be split apart under antitrust laws.

Shares of Facebook fell by around 0.6 percent today in response to the news. While the prospect of an antitrust break up would be catastrophic for the stock price, shares of Facebook have been steadily rising over the past six months despite these setbacks. At the beginning of the year, Facebook was trading below $140 and now trades at $187 per share.

Facebook Company Profile

Facebook is the world’s largest online social network, with more than 2 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos.

On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Facebook refers to this as Facebook Watch. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products.

Users can access Facebook on mobile devices and desktop. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada, and 25% from Europe. With gross margins above 80%, Facebook operates at a 40%-plus margin. – Warrior Trading News