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Facebook's market capitalization has dropped below $600 billion, which might help it dodge new antitrust scrutiny.

  • For the first time since May 2020, Facebook owner Meta's market capitalization fell below $600 billion on Tuesday.
  • In a bundle of competition laws aimed at Big Tech, House members chose that number as the bar for a "covered platform."
  • The achievement highlights one of the difficulties in enacting legislation aimed at the tech industry.

One benefit of Facebook's declining market capitalization could be the prospect of avoiding additional antitrust liability.

On Tuesday, the business, which was recently rebranded Meta, closed with a market cap of less than $600 billion for the first time since May 2020. The stock dropped 2.1 percent, bringing its market capitalization to $599.32 billion.

The $600 billion market capitalization figure was also chosen by House lawmakers as the threshold for a "covered platform" under a set of competition laws aimed squarely at Big Tech. If Meta can stay below that threshold, it would avoid the additional restrictions that the proposals would impose on how it conducts business and makes transactions, while larger competitors like Amazon, Alphabet, Apple, and even Microsoft will be subject to the requirements.

Any of the bills could take a long time to become law, if they do so at all. The bills could still be changed, and even if they aren't, they will continue to apply to platforms after they fall below the market cap level for a period of time. One Senate bill, which recently passed the Judiciary Committee, employs a lower market cap threshold of $550 billion than its House counterpart.

Nonetheless, the achievement highlights one of the difficulties in enacting legislation aimed at the computer industry. Legislators must also aim to include a chosen set of firms, in addition to ensuring that the bills do not address outdated issues by the time they are passed.

The Platform Competition and Opportunity Act is one bill that could have a big influence on Meta if it's deemed a covered platform by the time it passes. Rep. Hakeem Jeffries, D-N.Y., filed the bill, which has a Senate counterpart introduced by Sen. Amy Klobuchar, D-Minn., to make it more difficult for covered platforms to recruit young potential competitors.

The Federal Trade Commission has already filed an antitrust complaint against Facebook, alleging that it leveraged its acquisitions of Instagram and WhatsApp to preserve monopoly power. If this new bill passes and Meta is affected, it may be considerably more difficult for the corporation to undertake such purchases in the future.

When federal regulators designate a platform as covered by the law, the corporation must have net yearly sales or a market cap of $600 billion, adjusted for inflation, at the time of the designation or litigation brought under the act, according to the House version of the bill.

The Senate version says the market cap for a covered platform's market cap should be calculated using a "simple average of the closing price per share of the person's common stock issued for the 180-day period ending on the date of adoption of this Act."

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