As an overview of the events that took place in week 39 of October 2021, AXL Capital Management presents:
Mark Zuckerberg’s empire in risk
Facebook, Instagram, Whatsapp, and Messenger, the two social media and the two messaging of the great Californian went through this Thursday a blackout unprecedented that sank that group in reputational and economic terms. The incident caused by technical trouble constitutes the most major error never seen before» according to Downdetector; whole monitors online outages.
Facebook apologized through of tuit published on Monday at night, just when the application came back online. «We have been working hard to reset the access to our applications and services, and we are pleased to inform you that right now coming back online,» said the firm. But this error happens at a delicate moment to the great Mark Zuckerberg.
In addition to the people and companies that depend on Facebook’s tools, Zuckerberg received financial stroke. The Fortune Magazine said the Monday that, the entrepreneur’s fortune plumbed 6 billion from the previous day to just under $117 billion.
For Facebook’s rivals, on change was a great day. The messaging services of Telegram passed of being the fifty-sixth most downloaded free app in the United States to become the fifth, according to the specialized company SensorTower. The encrypted messaging Signal twitted that millions the new users joined.
Fall on Stock Exchange
New York Stock Exchange, for its part, finished on Monday 4th October in strong descent, affected for the technology’s fall, particularly Facebook, and between inflation fears to the heavy rise of oil.
Facebook, a Nasdaq heavyweight, fell 4.89% on the stock market to 326.23 dollars. From its September highs, the firm lost 15%. Facebook was "in the spotlight as one of the biggest losers" of the session, analysts summarized. The company is one of the largest market capitalizations on Wall Street, behind Apple, Microsoft, Google (a subsidiary of Alphabet), and Amazon.
The technology sector was already affected from the opening by concerns about inflation in the United States, which hurts the ability of technology groups in particular to finance their future financing and their stock purchases, however, in the day on Tuesday, October 05, after Facebook recovered from the failure, Wall Street has rebounded strongly.
Facebook considered a “Monopoly”
Federal Trade Commission of USA and a prosecutors group of 48 of the 50 states of the country presented the last December of 2020 a request against Facebook to reduce the company´s size and its position in the market. According to suit, the technology directed by Mark Zuckerberg has been kept its Monopoly in the social media sector for years through business behaviors that are an attack on the free exercise of competition. The reaction of technology doesn’t make the wait and in a communicate lamented the “adverse effects” that said restrictions will have over the business community and the users of its services.
The cipher
When FTC regulators set out to prove that Facebook is not just a giant; but a giant monopoly, they faltered and failed. And a federal judge dismissed their much-watched antitrust case against Facebook (in June 2021), seen as the government's first real effort to curb Facebook's dominance after several years of increasing political rhetoric against the company and rounds of congressional testimony investigating Facebook.
What happened. The FTC pivoted its case around a number. In their original 53-page court filing made in December, they estimated that Facebook owns "more than 60%" of a market they defined as "personal social networking."
The FTC did not provide further details on how it arrived at the 60% figure or what it represented: users, revenues, it was unclear. Also, what exactly constitutes the term "personal social networks." The phrase, in theory, allows the FTC to distinguish between Facebook and professional networks, such as LinkedIn, and messaging apps, such as Telegram or Signal.
While there is no firm legal rule, in general, antitrust cases proceed when authorities can show that a defendant controls more than 70% or more of a market. During the government's antitrust case against Microsoft, for example, regulators had estimated that Microsoft dominated between 80% and 85% of the market.
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