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The Federal Trade Commission is seeking a decision in federal court to force the company to sell part of its assets, including Instagram and WhatsApp. Then Facebook would be fragmented. The prosecuting states are not opposed to this request, reports CNN.
“Social media has become an integral part of life for millions of Americans,” said Ian Conner, director of the Office of Competition at the Federal Trade Commission. – Facebook’s actions to strengthen and maintain its monopoly deprive people of the benefits of competition. Our goal is to eliminate Facebook’s anti-competitive practices and restore competition so that innovation and free competition can flourish. “
The parallel lawsuits, which lasted for more than a month, became an unprecedented challenge for one of the most powerful companies in Silicon Valley. They focus on the two most important purchases of the Facebook Empire: the social network Instagram and the chat application WhatsApp. In 2012, Facebook announced that it would buy Instagram for a billion dollars. AMERICAN DOLLAR; Two years later the news of the acquisition of WhatsApp for 19,000 million dollars appeared. AMERICAN DOLLAR.
The lawsuits came about 14 months after New York State Attorney General Letitia James announced that her office led a group of attorneys general investigating Facebook’s alleged anti-competitive practices. More than 40 attorneys general contributed to the lawsuit filed Wednesday. The 2019 Federal Trade Commission is conducting its own investigation into Facebook’s anti-competitive behavior in June.
“For nearly a decade, Facebook has used its monopoly and dominance of the market to eliminate smaller competitors and stifle competition,” James told a news conference Wednesday. “With a lot of data and money, Facebook has crushed or threatened potentially threatening companies.”
The state’s lawsuit asks the court to issue an ordinance requiring Facebook to inform officials of any planned acquisition if it is worth at least $ 10 million. AMERICAN DOLLAR.
“The key fact of this case, which the Federal Trade Commission does not mention in its 53-page lawsuit, is that the allegations were dropped many years ago,” Jennifer Newstead, Facebook’s vice president and chief legal officer, said in a statement. “The government seems to have changed its mind and sent a terrible message to American businesses that no decision is final.”
“People and small businesses choose Facebook for free and advertise on this social network not because they have to. They use our platform, applications and services because they provide the greatest value,” he added. “We will persevere in defending the rights of people to choose from “.
Although regulators did not oppose the acquisition of WhatsApp and Instagram at the time, competition law enforcement officials have the right to change their minds if new evidence emerges, said former Federal Trade Commission chairman William Kovacic.
“There is no provision in the United States Mergers Act that states that an agency’s decision to approve a transaction protects the transaction from further evaluation,” he explained.
Under scrutiny, Facebook found itself largely due to acquisitions that helped attract an impressive number of customers. According to Facebook’s financial statements, more than three billion people use its services and devices today. users. This dominance has prompted some legal experts, including US lawmakers, to ask the question: Did Facebook CEO Mark Zuckerberg decide to eliminate competitors simply by acquiring them?
As Washington began to show growing interest in Facebook, the company had more than a year to prepare. First, the social media giant decided to tightly integrate its devices on a technical level. Some critics have called the decision a special strategy to prevent possible fragmentation. Facebook has also hired more attorneys with experience in antitrust and litigation. Additionally, the Zuckerberg-led company adjusted its public stance and gave the impression that it was not opposed to regulation, but suggested that overly strict measures could give other countries, such as China, an advantage in a rapidly evolving tech sector.
On Wednesday, Facebook became the second global technology company to be sued by state and US officials this year for violations of antitrust laws. In October, the Justice Department and 11 states filed a lawsuit against Google alleging that Google had stifled competition to maintain its powerful position in online search and advertising. (The defendant described the lawsuit as “seriously flawed” and claimed that people use Google’s platform not to translate, but of their own free will). in the late 1990s and into the 21st century. at first.
Facebook and Google aren’t the only tech companies causing headaches for policy makers. US officials are increasingly investigating the technology sector for possible anti-competitive practices. Particular attention is paid to the big four companies, without which our lives today are hard to imagine. Officials were caught up in both Apple’s reluctance to lose control of the iOS operating system and Amazon’s behavior toward independent providers via email. business platform.
In Facebook’s case, government officials will have to prove in court that the company’s alleged violations caused measurable harm to consumers or competitors, said Hal Singer, an economist and antitrust expert at the Public Policy Institute. from George Washington University.
“The impact does not necessarily have to be related to price, but also to the impact on privacy,” he said. “But you need to establish a causal link.”
According to the state’s lawsuit, consumers have been hurt by allegedly inappropriate Facebook practices. Internet users have fewer options, choosing a social media platform degrades their experience. The technology industry has also been hurt by “reduced investment in potentially competing services.”
State officials also allege that Facebook opened its social platform to third-party app developers to attract them, but later withdrew access to Facebook services when it began to view them as dangerous competitors.
Singer reasoned that if Facebook were found guilty of breaking the law, the company could try to anticipate fragmentation, arguing that its services were too closely linked to separate them. On the other hand, the final decision will be made by the court.
As the lawsuit against Microsoft has shown, antitrust lawsuits sometimes last for years. However, a published verdict can have a great impact. According to experts, the lawsuit filed by Microsoft paved the way for Google to stand up.
The court’s order to split Facebook or restrict its activities is likely to have far-reaching effects on the emergence of new companies and the range of products available to consumers on the market.
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