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The lawsuits allege that Facebook tried to stifle competition by acquiring the messaging apps: Instagram in 2012 and WhatsApp in 2014.
Chip Somodevilla / Getty Images
- The lawsuits allege that Facebook sought to stifle competition by acquiring the messaging apps Instagram and WhatsApp.
- Scrutiny has been mounting for large tech companies that have extended their dominance in recent years, including during the global pandemic, as more people turn to internet platforms for goods and services.
- Facebook said it will “vigorously” defend its actions and denied abusing its position.
US federal and state antitrust agents filed a lawsuit against Facebook on Wednesday alleging that the social media giant abused its dominant position with its acquisitions of the messaging services Instagram and WhatsApp.
Separate lawsuits filed by the Federal Trade Commission and a coalition of state officials called for the divestment of Instagram and WhatsApp, services that have billions of users and are part of the Facebook “family” of applications.
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” said Ian Conner, director of the FTC’s Office of Competition.
“Our goal is to roll back Facebook’s anti-competitive behavior and restore competition so that innovation and free competition can flourish.”
State antitrust agents from 48 states and US territories filed a separate legal action.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and end competition, all at the expense of everyday users,” said New York State Attorney General Letitia James, who lead the coalition.
The lawsuits allege that Facebook sought to crush competition by acquiring the messaging apps: Instagram in 2012 and WhatsApp in 2014.
The action heralds a fierce court battle that seeks to force Facebook to ditch the apps that have become an increasingly important element of the California giant’s business model and embedded in its technology.
Facebook said it will “vigorously” defend its actions and denied abusing its position.
“Antitrust laws exist to protect consumers and promote innovation, not to punish successful companies,” Facebook general counsel Jennifer Newstead said in a statement.
“Instagram and WhatsApp became the amazing products they are today because Facebook invested billions of dollars and years of innovation and experience to develop new features and better experiences for the millions who enjoy those products.”
Newstead added that these deals had been approved years ago by the FTC, which, she said, meant that “the government now wants a renewal, sending a chilling warning to US companies that no sale is final.”
Harm to the consumer?
Some analysts argued that antitrust cases would have a difficult time proving that Facebook harmed consumers, as its services are largely free.
Jessica Melugin, of the libertarian think tank Competitive Enterprise Institute, called the actions “political theater disguised as antitrust law” and argued that “one billion consumers around the world have benefited from Facebook’s purchase of Instagram and WhatsApp.”
Cleveland State University law professor Christopher Sagers said the case may have merit because Facebook “has been a blatantly predatory and exclusionary stalker in every industry in which it has been involved.”
But he also noted that “the US antitrust law is now very difficult to enforce in all cases, especially in cases like this, which do not involve conspiracy between competitors and rather involve only the unilateral conduct of a large company.”
The case is likely to depend not only on Facebook’s share of social media users, but also on the vast amount of data it collects from some three billion users worldwide, including two billion on WhatsApp and one billion. On Instagram.
Tiffany Li, a Boston University law professor who studies the sector, said that while Facebook has rivals competing for the attention of Internet users, it has a huge advantage because of its access to data.
“A company that has sole ownership of large amounts of user data, with no potential for interoperability or access to competition, can be anti-competitive,” he said.
The FTC announced earlier this year that it would review acquisitions made by five Big Tech firms over the past decade, opening the door to a wave of potential antitrust investigations.
The consumer protection agency said it would review deals made by Amazon, Apple, Facebook, Microsoft and Google’s parent Alphabet since 2010 amid growing complaints about technology platforms that have dominated key economic sectors.
The US Justice Department, which shares antitrust enforcement with the FTC, sued Alphabet, Google’s parent company, in October, accusing the Silicon Valley giant of maintaining an “illegal monopoly” on online search and advertising. and to open the door to a possible rupture. Eleven states in the United States joined that case.
