US FTC and 48 states accuse Facebook of monopoly

After a period of investigation, the US FTC has formally accused Facebook of long-term monopoly behavior for the past few years. They hope the judge can agree to spin off Instagram and WhatsApp that Facebook acquired in 2012 and 2014, and require Facebook to notify and obtain permission on future mergers and acquisitions. In addition to the FTC, 48 US states also accused Facebook of abusing its dominant position on social media to crack down on other competitors. In the words of New York Attorney General Letitia James, this is a “historic antitrust notice.”

Questioning the rationality of the Instagram and WhatsApp acquisitions is at the core of this widespread anti-Facebook monopoly action. “Mr. Zuckerberg realized that after acquiring and controlling Instagram, Facebook can not only remove direct threats from Instagram, as a personal social networking service provider, but can also greatly hinder other companies from using services to share photos on mobile phones to increase their influence. “The FTC wrote in court documents:” Similar to Instagram, WhatsApp has also posed a great threat to the monopoly of Facebook’s personal social network. Facebook has also chosen to deal with it through acquisitions rather than competing. “

In the opinion of state attorneys general, these two acquisitions ultimately hurt consumer interests by violating personal privacy and reducing people’s choice of alternatives to Facebook services. In addition, after the completion of the acquisition, Facebook also increased its efforts to collect user data and serve ads on these two platforms, but it did not have a good way to deal with accounts and false information that were extremely harmful. It is worth mentioning that in the allegations made by the FTC and the states, some examples were also cited of Facebook obstructing third-party developers and using their applications to track user habits.

Regarding the allegations against Facebook, the company’s vice president and general counsel, Jennifer Newstead, called it a “revisionist story” and stressed that Facebook will “actively safeguard” its own interests. In a response posted on the official blog, he noted that Apple, Google, Twitter, Snap, Amazon, TikTok, and Microsoft are “world-class rivals” of Facebook. And he said bluntly that in the FTC and the states “for many years with inactivity,” Facebook “spent billions of dollars in investment and a lot of energy” to make Instagram and WhatsApp “the applications that everyone now loves.” In Newstead’s view, this allegation may challenge the US government’s own procurement review procedures.