Facebook In Legal Antitrust Battle With FTC—Claims Company Purchased Competitors
On Wednesday, New York, along with 48 other US attorney generals, filed a lawsuit against Facebook based on antitrust claims.
The filing alleged that the media giant is in violation of antitrust laws with the company’s purchase competitors and eliminating alternatives to protect consumers’ privacy.
A similar suit alleging the same antitrust violations was filed separately by the Federal Trade Commission (FTC).
The foundation of both lawsuit filings is Facebook’s purchasing of Instagram in 2012 and WhatsApp in 2014. The media company also purchased other smaller tech companies in what is considered to have been done to curb and eliminate competition.
The FTC portion of the antitrust lawsuit is aimed at forcing Facebook to break off and sell both Instagram and WhatsApp.
The FTC lawsuit stated: “After identifying two significant competitive threats to its dominant position—Instagram and WhatsApp—Facebook moved to squelch those threats by buying the companies, reflecting CEO Mark Zuckerberg’s view, expressed in a 2008 email, that ‘it is better to buy than compete.'”
With the four apps the media company currently owns, Facebook, Messenger, Instagram, and WhatsApp, Facebook is now the largest social network globally. The company boasts 2.7 million users monthly across its four apps.
Attorney General Letitia James offered: “No company should have this much unchecked power over our personal information and our social interactions, and that’s why we are taking action today.”
While appearing before the Senate in November, Facebook CEO Zuckerberg chose to downplay the true significance of the company’s purchasing Instagram. His defense was that it was not considered a competitor at the time and that Facebook was mocked for putting so much money into the purchase.
In a statement Wednesday, Jennifer Newstead, general counsel for Facebook, claimed that the FTC’s lawsuit was “revisionist history,” reminding that when the purchase of Instagram and WhatsApp was original approved by the commission.
The suit against Facebook comes on the heals of another tech giant lawsuit in less than two months. Along with a coalition of state attorneys, the Justice Department filed a lawsuit against Google. The lawsuit claimed that Google was operating as a monopoly power and is the default search engine on many phones and tablets.
As it turns out, the Facebook lawsuit is much more severe than that of the lawsuit against Google, as the history of Facebook’s acquisitions is in question.
Will Facebook be forced to break off from Instagram and WhatsApp?