Recently, the United States government filed a lawsuit against Facebook alleging that the platform has engaged in anticompetitive behavior. The Federal Trade Commission is also looking to require the company to divest assets, including Instagram and WhatsApp, effectively breaking up Facebook as we know it.
Facebook has been under fire for the past few years as their acquisitions of Instagram and WhatsApp have been seen as a push to eliminate their rivals. This lawsuit is the culmination of a months-long investigation. Google was hit with a similar federal lawsuit back in October.
How will this impact advertisers?
Anti-trust lawsuits can take years to sort out, and the Facebook one should be no different. The platform will continue to operate business as usual until the final verdict is reached.
However, there are some potential effects to consider:
- With all targeting capabilities operating from the Facebook side, Instagram and WhatsApp could lose valuable segmentations as a result of the break.
- Brands could lose cost efficiencies via the algorithm if the ability to optimize towards automatic placements goes away.
- Costs across Facebook, Instagram, and WhatsApp could go up, which would make other platforms like Snapchat, Twitter, TikTok, Pinterest, and Reddit a more competitive space for advertisers to play in
- While this is a U.S.-based lawsuit, there could still be implications for international advertisers as well if the company was forced to break apart.
- Customer journeys across social platforms will be more fragmented making it harder for personalization.
As of right now, there is no action to take, but Tinuiti is closely monitoring and will alert you should any changes be required as a result of the lawsuit. Please contact us if you have any questions.