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Dozens of attorneys general, as well as the US Federal Trade Commission (FTC), filed lawsuits against Facebook on Wednesday to try to divide the social media giant into three parts, ditching Instagram and WhatsApp.
The lawsuits claim that Facebook illegally suppressed the competition by purchasing these rival companies that were challenging its dominance. They refer to the purchase of Instagram in 2012 for a billion dollars, and the acquisition of WhatsApp in 2014 for 19,000 million dollars. Facebook’s aggressive acquisitions of these competing companies, which helped bring the company’s total value to more than $ 800 billion, violate the Sherman Act and the Clayton Antitrust Act, according to the lawsuits.
“Facebook has used the power of its monopoly to crush smaller rivals and eliminate competition, all at the expense of users,” said New York Attorney General Letitia James, who is leading this effort, in a statement. published On twitter. “Instead of improving its own product, Facebook took advantage of consumers and made billions of dollars turning their personal data into a source of income.”
Delaware Attorney General Kathy Jennings echoed James, comparing Facebook to the railroad and telecommunications monopolies of the past.
“Whether it’s railroads, telecommunications, or social media, monopolies undermine consumer freedom of choice in our economy,” Jennings said in a release. “Facebook knowingly, openly and illegally took its users and developers as digital hostages during a decade of unfair acquisitions and mistreatment of developers. The lawsuit is not only intended to hold this company accountable for its conduct, but to free consumers from a monopoly and allow Delaware citizens the choice and freedom they deserve. “
Along the same lines, the FTC is seeking a permanent injunction in federal court that could, among other things: require the sale of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anti-competitive conditions on software developers; and require Facebook to request prior notice and approval for future mergers and acquisitions.
“Personal social media is critical to the lives of millions of Americans,” said Ian Conner, director of the FTC’s Office of Competition, in a statement. “Facebook’s actions to secure and maintain its monopoly deny consumers the benefits of competition. Our goal is to reverse Facebook’s anti-competitive behavior and restore competition so that innovation and free competition can flourish. “
In a statement, Facebook Vice President and General Counsel Jennifer Newstead said the lawsuits were “revisionist history” because they called for regulatory approval to buy Instagram and WhatsApp in the first place. This, of course, ignores the fact that approval of an acquisition in no way insulates a company from future legal or regulatory scrutiny. Facebook further stated that its products are good for users and small businesses “because our applications and services offer the most value.”
“This is revisionist history. Antitrust laws exist to protect consumers and promote innovation, not to punish successful companies. Instagram and WhatsApp became the amazing products that they are today because Facebook invested billions of dollars and years of innovation and expertise to develop new features and better experiences for the millions of users who enjoy those products, ”said Newstead. “The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it authorized these acquisitions years ago. The government now wants to undo what it did, sending a chilling warning to American companies that no sale is final. Individuals and small businesses don’t choose to use Facebook’s free advertising and services because they have to, but because our apps and services offer the most value. We are going to vigorously defend the ability of people to continue making that decision. “
The FTC began investigating Facebook’s anti-competitive practices on last summer. Several states began a similar investigation several months later.
In addition to New York and Delaware, the plaintiffs in the state lawsuit include Alaska, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Guam Territory, Hawaii, Idaho, Illinois, Iowa, Indiana, Kansas, Kentucky. , Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island , Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
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