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US news agencies report that the prosecutor in New York and 48 US states is suing Facebook for violations of competition laws. The laws are intended to prevent cartel activity and for companies to gain dominant market power.
Federal authorities, at the US Federal Competition Committee (FTC), have simultaneously filed a separate lawsuit, writes The New York Times.
The FTC claims that Facebook has squandered competition by buying from other rivals, such as Instagram and WhatsApp.
In this way, the company has gained too much power over the world’s most popular communications services, says FTC Director Ian Connor.
– Facebook’s actions to anchor and maintain its monopoly have prevented users from reaping the benefits of competition.
“Our goal is to curb anti-competitive behavior on Facebook and restore competition so free competition can flourish,” says Connor.
Facebook also owns the popular WhatsApp and Instagram apps.
Photo: Patrick Sison / AP
Requires WhatsApp and Instagram sales
CNBC writes that Facebook itself announced that US authorities investigated the company in July of last year.
The 48-state lawsuit requires Facebook to ditch WhatsApp and Instagram. Facebook bought the photo-sharing service Instagram in 2012 for more than NOK 5.8 billion.
So, Instagram had more than 30 million users. By 2018, the number of users had grown to more than 1 billion.
In 2014, Facebook bought the messaging service WhatsApp for more than NOK 100 billion.
“For nearly a decade, Facebook has used its dominance and monopoly to crush smaller rivals and purge competitors, at the expense of its users,” said New York State Attorney Letitia James.
James has led the investigation, which has been going on for more than a year.
The lawsuit was pending and the court decision is expected to be important not only for Facebook, but also for the other large dominant network companies.
Facebook shares fell
However, news of the lawsuit led to Facebook’s share falling dramatically, by more than three percent. Since then, he has recovered a bit. The stock fell just under two percent just after 9 p.m. Wednesday night.
Also in 2017, a critical light was shone on Facebook. At that time, it was referring to the handling of user data by the company. The information was revealed to have been used by the political computer company Cambridge Analytica, without the consent of the users.
The case ended when Facebook settled with the FTC for $ 5 billion last year. Internal Facebook documents showed that Facebook leaders were concerned about the growing popularity of Instagram.
In October, it was announced that the US Department of Justice and 11 states are suing Google. In the lawsuit, the tech giant is alleged to have abused its dominance in Internet searches to curb competition.
