Facebook announced on Wednesday that the Federal Trade Commission (FTC) had opened an antitrust investigation into the company, a revelation that came on the heels of a record $5 billion privacy fine from the federal agency.
"The online technology industry and our company have received increased regulatory scrutiny in the past quarter. In June 2019, we were informed by the FTC that it had opened an antitrust investigation of our company," Facebook said in an earnings release.
The revelation comes a day after the Justice Department separately announced that it was launching an investigation into whether major tech companies have stifled competition or harmed consumers.
The FTC earlier Wednesday ended an investigation into Facebook's privacy practices and its handling of the Cambridge Analytica scandal with a settlement that included a $5 billion fine and conditions requiring the company to submit to increased monitoring from an independent auditor.
The social network also agreed to pay $100 million to the Securities and Exchange Commission (SEC) to settle charges that it had misled investors about the potential material risks of its privacy practices.
Many Facebook critics dismissed the FTC settlement as a slap on the wrist for a company worth nearly $600 billion. But an antitrust investigation could pose even greater risk to Facebook.
Despite the swirling regulatory action, Facebook posted a strong second quarter on Wednesday, raking in $16.9 billion in revenue, with $2.6 billion in profits.
If the agency finds that Facebook has used its market power to engage in anticompetitive conduct, it could choose to pursue legal action, which would likely lead to a costly, years-long court battle.
The social network is one of a handful of companies that is also facing antitrust scrutiny from Congress, where a Democratic-led House Judiciary subcommittee is investigating tech giants' market power.
Betsy Lordan, a spokeswoman for the FTC, confirmed the agency's investigation but declined to comment further.
The FTC approved Facebook's acquisitions of Instagram in 2012 and WhatsApp in 2014 — decisions that critics have pounced on amid recent mounting furor over the company's market power.
Last week, a Facebook executive testified before the House Judiciary antitrust subcommittee and was grilled by lawmakers over its dominance and its record of buying out potential competitors.
“So you can understand skepticism because when a company owns four of the largest six entities measured by active users in the world in that industry, we have a word for that and that’s monopoly — or at least monopoly power,” Rep. Joseph Neguse (D-Colo.) said during the hearing.
Updated 5:40 p.m.