Facebook and Google are in hot water - The Hustle
The Hustle

Facebook and Google are in hot water

Another round of The Facebook Papers highlight shortcomings in the platform’s safety. Meanwhile, Google’s monopolistic ad exchange model is exposed in an unredacted lawsuit.

Sometime this week, Mark Zuckerberg is expected to rebrand Facebook to reflect the company’s ambitions as a metaverse company.

In line with this news, FB announced in its earnings that it will break out revenue from its VR/AR business line (Facebook Reality Labs).

These changes come in the midst of the latest round of The Facebook Papers — a series of damning internal documents provided by whistleblower Frances Haugen.

The Facebook Papers takeaways:

Facebook rebuts that it spends significant resources — 40k+ employees and $13B — to keep its platform safe and “does not put profits over people’s well-being.”

Google’s antitrust headache

Meanwhile, Facebook’s main competitor is facing big questions over its business model. Per The Wall Street Journal, an unredacted lawsuit from state attorneys general shows that Google takes a 22%-42% of transactions on its ad network (2-4x competing digital exchanges).

A viral Twitter thread highlights other allegations from the lawsuit:

Google’s dominant position in the ad business is described by one employee like this: “The analogy would be if Goldman [Sachs] owned the NYSE [New York Stock Exchange].”

If these allegations are true, it raises the likelihood of strong antitrust action against the search giant. Having already rebranded itself as Alphabet in 2015, Google will have to find another tactic to deflect attention away.

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