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- Natalie Sherman
- New York
Image source, Reuters
Federal and fiscal regulators from more than 45 US states sued Facebook on Wednesday for what they consider to be monopolistic practices to absorb potential competitors and stifle free competition.
The lawsuit is one of the most significant steps the US government has taken to date against the technology company and, if it is successful, it could lead to the court ordering Mark Zuckerberg to sell Instagram and WhatsApp.
Facebook alleges that the purchase agreements of these last companies, now under the magnifying glass of the courts, already received the approval of the authorities years ago.
“The government now wants a review, sending the chilling message to American businesses that there is no sale that is final,” said Jennifer Newstead, Facebook’s general counsel.
Newstead said the company had invested millions of dollars to make Instagram and WhatsApp successful and that Facebook would defend itself “vigorously” in court.
“Antitrust laws exist to protect consumers and promote innovation, not to punish successful companies,” he added.
What are the lawsuits?
Lawsuits filed by states and the Federal Trade Commission (FTC) focus on Facebook’s acquisition of Instagram in 2012, WhatsApp’s purchase in 2014, and rules governing the developers of Facebook. external software.
The plaintiffs accuse Facebook of taking an approach of “buy burial“to potential rivals, hurting competitors.
And also users, who according to prosecutors have lost control of their own data to support the company’s advertising revenue.
Image source, Reuters
The lawsuits cite internal emails from Zuckerberg.
The lawsuits cite internal messages from Zuckerberg, such as an email from 2008 saying it was “better to buy than compete.”
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and end competition, all at the expense of its users,” said New York Attorney General Letitia James, who is leading the legal battle. of the states.
“No company should have so much power without control over our personal and social interactions. That is why we are taking action today,” he added.
A long legal battle for Facebook
By James Clayton, BBC Technology Correspondent for North America
Sometimes it is quite difficult to understand how great is the power of this company: Facebook, Facebook Messenger, WhatsApp and Instagram, all owned by a single company
What the Federal Trade Commission (FTC) contends is that there is a reason Facebook came to dominate this lucrative sector: it acquired the competition illegally.
Image source, fake images
WhatsApp is one of the most used messaging apps in the world.
In 2012, Instagram was growing rapidly. Facebook was concerned.
Zuckerberg had admitted that Instagram was a competitor and bought it for a figure that now seems low: $ 1 billion.
WhatsApp was also growing at incredible speeds in 2014. Was it going to threaten Facebook’s own messaging service? Zuckerberg also bought it.
Both acquisitions were previously reviewed by the FTC and were approved.
Image source, Reuters
The Trump administration has had a complicated relationship with Facebook.
That’s the argument from Facebook, who bought these companies when they were much smaller, that there was nothing predetermined about their success.
In other words, don’t punish Facebook for creating successful American businesses.
The separation of Instagram and WhatsApp from Facebook will now be decided in court, but these antitrust lawsuits take time.
There will also be ample opportunity for appeals, so we should not expect a potential Facebook breakdown in the near future.
But this is one more indication of where the courts and politicians are heading now: Big tech companies are too big in the eyes of many people.
Monopoly accusations
The lawsuits come at a time when US regulators are taking a closer look at the power that tech companies enjoy.
This summer, the bosses of Google, Amazon, Facebook and Apple were forced to testify before Congress as part of a broader investigation into their influence in the market.
In October, the Justice Department sued Google, accusing the company of violating US competition laws to maintain a monopoly on Internet search and advertising.
More than 2.5 billion people use one of Facebook’s applications every day.
The company, valued at almost US $ 800,000 million, employs more than 56,000 people and reported more than $ 18 billion in profits last year.
The Institute of Open Markets, a Washington think tank that has been pushing regulators to take a more aggressive stance against tech companies, said the lawsuits were a “critical step” forward.
“There is still more to do, but this is a great moment,” the organization wrote on Twitter.
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