FTC Investigating Twitter for Antitrust Practices

FTC Investigating Twitter for Antitrust Practices

The Federal Trade Commission is investigating Twitter for antitrust practices, an inquiry that may hamper the company just as it moves to expand its services and profits.

The FTC has started the preliminary work for an antitrust case, asking various developers whether Twitter makes it difficult for them to create apps that run on its platform. Most notably, the regulator enlisted disgruntled mobile programmer “UberMedia” to provide information on its tussle with Twitter.

UberMedia’s grudge with Twitter began in February, when it says the social media company suddenly accused it of trademark infringement. After Twitter suspended its “UberTwitter” and “twidroyd” apps, UberMedia says it had a difficult time bringing them back into compliance before Twitter finally reinstated them.

In addition, early this year, UberMedia was in acquisition talks with TweetDeck, a third-party Twitter app, but Twitter snagged TweetDeck in May, thwarting UberMedia’s plans.

Given this state of affairs, UberMedia said it is more than willing to answer the FTC’s call.

“We have been contacted by the FTC and we intend to fully comply with their request for information,” the company stated in an e-mail.

The probe comes as Twitter drives to expand its holdings and solidify its platform. The company, though immensely popular with 200 million tweets posted each day, does not yet turn large profits, landing only $100 million per year compared to Facebook’s $3.5 billion.

To compete effectively, Twitter has been adding new features like photo-sharing and introducing livestream ads, rendering many third-party apps obsolete, and angering the developers.

Major Twitter investors like Fred Wilson criticize the company for failing to expand its platform earlier.

“Much of the early work on the Twitter Platform has been filling holes in the Twitter product,” Wilson wrote in his widely-read blog. “Mobile clients come to mind. Photo sharing services come to mind. URL shorteners come to mind. Search comes to mind. Twitter really should have had all of that when it launched or it should have built those services right into the Twitter experience.”

As a result, Twitter has been scrambling to fill the gaps and fault lines in its platform. But a lengthy, potentially costly antitrust investigation may slow momentum for the already lagging company, which has been trying to keep up with its own success.

While the scope of the probe has been described as “narrow” by a source close to the matter, the investigation should not impact Twitter’s growing ad strategy. But it may sour relations with already tense developers who contribute to the ecosystem.

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