Facebook co-founder, chairman and CEO Mark Zuckerberg testifies before the House Energy and Commerce Committee at the Rayburn House Office Building on Capitol Hill on April 11, 2018 in Washington, DC.
Yasin Ozturk | Anadolu Agency | Getty Images
Before federal and state investigators filed sweeping antitrust claims against Facebook in federal court this month, the company’s top lawyers reportedly expanded an olive branch to show that it could boost competition.
Facebook’s attorneys told state and federal researchers that it could help a new social network get off the ground by licensing its own code and user relationship webs to another company, The Washington Post reported Tuesday.
Investigators ultimately refused to respond to Facebook’s suggestion, the Post reported, but the offer illustrates both what Facebook was willing to give up to get out of the lawsuits and what not. Facebook has denied claims of anti-competitive behavior.
Some of the state and federal lawsuits have focused on the concept of network effects, which describes how a network, in business terms, can become increasingly “sticky” to users as it grows larger. For example, if most of a user’s friends and family have joined a single social network, that user will have fewer incentives to switch to a new platform with fewer users, even though it has some more desirable features.
The bid reported by Facebook may not fully reflect this effect. Based on the lawsuits, regulators believe that Facebook’s endurance is based not only on its technology, but also on its already entrenched position in many people’s lives.
Facebook did not comment to CNBC, but a spokesperson told the Post in a statement, “We will continue to vigorously defend the ability of people and businesses to choose our free services, ads and apps for the value they deliver. “
A spokesman for the FTC declined to comment, and a representative for New York Attorney General Letitia James, who is leading the states’ efforts against Facebook, did not immediately respond.
Read the full story in The Washington Post.
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