Tech social media has drawn widespread criticism for abusing its monopoly advantage to heavily censor messages this year. The U.S. Federal Trade Commission on Wednesday (9) sued Facebook Inc. for using illegal practices to eliminate the competition it faces in the social network, hoping a judge will require the company to divest its Instagram and WhatsApp subsidiaries.
Facebook shares fell 1.93% to $277.92 on the same day, and triggered a 1.94% drop in the overall Nasdaq index, the biggest one-day drop in six weeks, outpacing the S&P and Dow’s 0.79% and 0.35% declines, respectively. The Nasdaq also hit an all-time high of 12,607 on the same day, but Facebook shares have led the decline since their all-time peak of $303 on Aug. 26, and are down about 8.3 percent so far, lagging the Nasdaq and reflecting investors’ pre-judgment of a possible antitrust lawsuit against the stock.
In addition to Facebook, Google and Twitter are among those restricting speech on social media this year about the presidential election and the epidemic. Legal experts have argued that Facebook and Twitter’s testimony at previous congressional hearings shows a lack of transparency in their censorship of content.
Shares of Google’s parent company Alphabet Inc. sank 1.85 percent to close at $1,777 on Thursday, having fallen about 2.5 percent from its all-time peak of $1,824 on Dec. 2. Twitter fell 0.42 percent to $47.23 on Thursday, down about 10 percent from its Oct. 29 peak of $52.43, but the stock had fallen as low as $39.47 on Nov. 2 before the election, a 24.7 percent plunge from its peak.
In October of this year, the U.S. Department of Justice also sued Google for abusing its web-exclusive position to hinder competition from rivals.
In 1998, the U.S. federal government also sued Microsoft for monopolizing the sale of Internet Explorer as a compulsory bundle with Windows, the operating system for personal computers, and the case was not settled until 2001, when the stock dropped from its 1999 peak of $58.8 until it bottomed out at $17.1 in 2009. The company, which only broke through its previous high in 2009, closed Thursday at $211.80.
Apple chief executive Cook said knowingly on Wednesday that some people think Silicon Valley is exclusive, and that some of the big issues surrounding tech stocks today have to do with a lack of accountability for what’s happening on its platform. Apple doesn’t have a social platform, but it’s already working on features for Apple News.
Many things like misinformation or violence can be powerfully amplified on social media, but Apple doesn’t want to be part of that media platform, doesn’t want to be part of the hate, and we’re going to do everything we can to prevent that from happening,” Cook said.
Starting in 2021, Apple will remove applications from the App Store that are used to track users without their permission. This is a major departure from Facebook’s approach, which believes that without tracking users, ads will not be targeted and will become less effective, and estimates that its ad business could drop by 50% if it adopts Apple’s model.
In 2019, Facebook was fined $5 billion by the Federal Trade Commission for Cambridge Analytica’s improper use of Facebook users’ personal information, a case that involved the unauthorized use of personal information by 87 million Facebook users.
On Thursday, Apple was also hit with a 2 percent drop to close at $121.78. The company has been a victim of this scandal.
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