Facebook's political woes aren't over. But Wall Street is unfazed.
WASHINGTON - Facebook isn't out of the woods just yet.
Yes, the social network eached a settlement with the Federal Trade Commission that ends a broad probe into its privacy practices. But hours after that announcement, Facebook confirmed in its quarterly earnings report that the FTC has opened another formal investigation, this time into antitrust concerns.
The probe is in addition to a broad antitrust review of the tech giants that the Justice Department announced earlier this week, as well as a bipartisan House investigation into tech's power and impact on competition.
"It looks like the antitrust winter is over," Columbia University law professor Tim Wu, who chronicled the subject in his book "The Curse of Bigness: Antitrust in the New Gilded Age," told my colleagues earlier this week.
But Facebook seems likely to prove resilient despite unprecedented political pressure and record-breaking fines.
The company's stock soared as it posted strong earnings - on the same day it announced the antitrust probe, a historic $5 billion settlement with the FTC with new limitations on its business and a $100 million settlement with the Securities and Exchange Commission.
The stark contrast underscores how Wall Street has been unfazed by Washington's efforts to rein in the social networking giant. And that's where the true test might be. The company has been able to continue to grow its business, reaching $16.9 billion in revenue last quarter, beating analyst estimates of $16.49 billion, despite the compounding political headaches in Washington.
"It's a balancing act for Zuckerberg and Facebook to navigate this, because investors want to see growth and profitability," Daniel Ives, managing director for equity research at Wedbush, told The Washington Post.
"But in terms of the stock, Facebook and Zuckerberg have been almost Teflon-like over the last two years," Ives continued. "And as long as they continue to execute, all the other issues . . . will become background noise."
The stock's resilience has stoked fears in Washington that federal regulators are not doing enough to hold the company to account. Congressional Democrats and Sen. Josh Hawley, R-Mo., both blasted the FTC's settlement with Facebook yesterday, arguing that it did not place enough limitations on Facebook's business practices. There are growing concerns that the agency doesn't have the resources or the will to police tech giants in a meaningful way, even as it becomes more aggressive in opening investigations into these companies.
Hawley said that yesterday's FTC settlement with Facebook amounted to a "parking ticket" that "will not deter them in any way."
"I dont have a lot of confidence in the FTC even if they had an actionable claim," he said. "They would act push for and show the tenacity and the guts to bring it because frankly they havent done it to date."
The FTC's antitrust probe of Facebook will be a new test of the agency's power at a time when some are questioning if it should have oversight over Big Tech.
"It's not clear to me whether they need more budget, more staff," Hawley told Tony. "I'm wondering whether we need to reassign their jurisdiction to another agency."
Some tech policy experts who were disappointed by the FTC's settlement with Facebook over its privacy practices saw the new antitrust probe as a "silver lining." Ashkan Soltani, a former FTC chief technologist, said: