Sen. Elizabeth Warren has called for the breakup of big tech companies like Facebook. Regulators have opened investigations into Facebook’s power in social networking. Even one of Facebook’s own founders has laid out a case for why the company needs to be split up.
Now the world’s biggest social network has started to modify its behavior — in both preemptive and defensive ways — to deal with those threats.
Late last year, Facebook halted acquisition talks with Houseparty, a video-focused social network in San Francisco, for fear of inciting antitrust concerns, according to two people with knowledge of the discussions. Acquiring another social network after Facebook was already such a dominant player in that market was too risky, said the people, who spoke on the condition they not be identified because the discussions were confidential.
Facebook has also begun internal changes that make itself harder to break up. The company has been knitting together the messaging systems of Facebook Messenger, Instagram and WhatsApp and has reorganized the departments so that Facebook is more clearly in charge, said two people briefed on the matter. Executives have also worked on rebranding Instagram and WhatsApp to more prominently associate them with Facebook.
The changes are now prompting a debate about whether a more knitted-together Facebook, WhatsApp and Instagram is just smart business or helps strengthen potential anti-competitive practices. CEO Mark Zuckerberg has repeatedly said his company faces competition on all sides and is loath to accept a fragmented version of the social giant. He does not want to lose Instagram and WhatsApp, which are enormous and have the ability to continue fueling the Menlo Park company’s $56 billion business.
“The big question is, is this a logical business plan?” said Gene…