Facebook hit with 2 massive antitrust lawsuits from the FTC and 46 states seeking to spin off Instagram and WhatsApp
antitrustlawsuits, one from the Federal Trade Commission and one from 48 state attorneys general.
- Both lawsuits revolve around the company's acquisitions of
- Both acquisitions obtained regulatory approval at the time but have recently come under heavy scrutiny.
- The lawsuits are seeking a breakup of Instagram and WhatsApp from the social-media giant.
Facebook just got hit with two big antitrust lawsuits.
The suits were filed on Wednesday by the Federal Trade Commission and 48 state attorneys general. Both revolve around Facebook's acquisitions of the photo-sharing app Instagram and the encrypted messaging app WhatsApp.
The lawsuits allege that Facebook used a strategy of neutralizing competitors before they could threaten the company's dominance of the social-media market. The suits call out Facebook's decisions to buy rather than compete with Instagram and WhatsApp, and they allege it imposed "anticompetitive conditions" on software developers.
Both complaints seek a "divestiture of assets" for Facebook - that is, breaking off Instagram and WhatsApp from the social-media giant. Additionally, Facebook could be required to get approval from the government before any mergers or acquisitions in the future.
Facebook obtained regulatory approval when it bought Instagram in 2012 and WhatsApp in 2014, but lawmakers have recently scrutinized the acquisitions.
The coalition of attorneys general, led by New York Attorney General Letitia James, began an investigation into Facebook in September 2019, and the
Facebook said on Wednesday that it was reviewing the complaints and would have "more to say soon."
"Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day," Facebook said.
Facebook was also part of a broad House Judiciary Committee antitrust investigation this year that looked into the tech giant's acquisitions of smaller companies. Officials are closing in on establishing regulation in the tech world, a move that's become heavily politicized as Republicans and Democrats spar over Section 230 protections.
Emails from 2012 released as part of that investigation revealed Facebook CEO
"One way of looking at this is that what we're really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again," Zuckerberg said in the email.
Rep. David Cicilline, who led the House investigation, said that Facebook's acquisitions of Instagram and WhatsApp were "classic monopoly behavior" and that he thought the company should be broken up.
At an antitrust hearing in July, congressional lawmakers grilled Zuckerberg about what motivated the company to acquire Instagram and WhatsApp, popular platforms that would have been competitors had Facebook not purchased them.
Zuckerberg said he viewed Instagram as "a competitor and a complement to our services."
Senator Amy Klobuchar, a member of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, told Business Insider she was happy to see the FTC and attorneys general taking action against Facebook.
"Numerous reports have brought Facebook's long history of anti-competitive behavior to light. The company's acquisitions of Instagram and WhatsApp have made the social media landscape less competitive and worse for users. Big technology companies like Facebook should not have free reign to impose their will on the market, and they must be held accountable when they attempt to do so. I'm glad the FTC and state enforcers are taking action to stop Facebook's anti-competitive behavior," Klobuchar said in a statement.
This isn't the first time Facebook has faced off against the FTC. The agency fined Facebook $5 billion in July 2019 over its handling of the Cambridge Analytica data breach.
The lawsuit against Facebook is the second major piece of legal action this year aimed at big tech, following a Department of Justice lawsuit filed against Google in October.
- No crypto ban in India — SEBI will reportedly be pulled in to regulate the sector
- I wore the same outfit for a week, as part of a productivity hack promoted by Steve Jobs — but it didn't really work. After speaking to psychologists, I'm not surprised.
- Maruti cars to cost you more from January next year
- Dell Latitude 7320 Review — A good-looking compact convertible let down by the keyboard
- SaaS firm RateGain’s IPO opens tomorrow — should you invest?
- Global digital advertising accounted for 64.4% of all advertising in 2021, up from 60.5% in 2020: GroupM report
- After Mercedes-Benz, Audi, Maruti Suzuki, now Tata Motors increases price of its vehicles from January
- 44 key areas, a national framework, and a multi-institutional approach — Here's what you need to know about India's new National Blockchain Strategy