Though the cases from the FTC and attorneys general aren’t exactly the same, the parties collaborated, and their cases lay out similar claims about why Facebook is anti-competitive.Įssentially, they find that Facebook is a powerful social media monopoly that collects a massive amount of data on American users that the company uses to sell advertisements. Why the US government says Facebook is bad for Americans Still, it’s too soon to say what the impact of these lawsuits will be. These suits, however, could lead to Facebook being forced to take certain actions, like paying fines or selling off WhatsApp and Instagram based on existing laws. Though the findings are similar, Wednesday’s lawsuits are different from the lawmakers’ report, which makes recommendations but can’t do much to enforce those suggestions. A still unresolved question is whether antitrust laws written decades ago are up to the task of regulating companies in the age of the internet. In October, the House Antitrust Committee concluded a 16-month investigation by releasing a wide-ranging report that found that Facebook and its fellow tech giants Amazon, Apple, and Google have antitrust practices and need to be better regulated. The lawsuits come at a pivotal time for Big Tech, as the public, regulators, and lawmakers on both sides of the aisle are scrutinizing these companies and their impacts on society and the economy. And the only way to repair that is to create a new enterprise.” “Both of them are premised on the idea that the main source of dominance for Facebook was the acquisitions of Instagram and WhatsApp in particular, and that those are the key pillars of the company’s current market position. It’s a compelling argument, William Kovacic, a former FTC member and a professor of law and policy at George Washington University, told Recode. “Not content with attracting and retaining users through competition on the merits, Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire,” says the suit. The FTC’s case comes to the same conclusion. “Facebook illegally maintains that monopoly power by deploying a buy-or-bury strategy that thwarts competition and harms both users and advertisers.” “For almost a decade, Facebook has had monopoly power in the personal social networking market in the United States,” the AG suit argues. The suits claim Facebook depended on these acquisitions to become the monopoly it is today, giving it the power to crush competitors it does not acquire. Their cases focus in particular on Facebook’s acquisitions of Instagram, a photo-sharing app it purchased for $1 billion in 2012, and the global messaging app WhatsApp, which it bought for $19 billion in 2014. ![]() But a blog post published by the company on Wednesday called the lawsuits “revisionist history.” The company emphasized that its acquisitions of WhatsApp and Instagram were approved by the FTC years ago, and said allowing a “do-over” would raise a concerning precedent that “no sale will ever be final.” “No company should have this much unchecked power over our personal information and our social interactions.”įacebook did not immediately respond to a request for comment. “They stifled innovation, and they degraded privacy protections for millions of Americans,” New York Attorney General Letitia James, who led the states’ lawsuit (which includes 46 states plus Washington, DC, and Guam), told reporters on Wednesday. The lawsuits allege that such action may be necessary because Facebook has crushed its competitors and achieved dominance by buying potential rivals, and that this limits American consumers’ choices and reduces their access to privacy protections. They both essentially call for Facebook to be broken up by forcing it to undo its acquisitions of Instagram and WhatsApp, which together have billions of users. The two lawsuits, which follow more than a year of investigations, are the biggest antitrust challenge Facebook has faced. On Wednesday, the US Federal Trade Commission and 48 US state attorneys general filed major lawsuits against Facebook that argue the social media giant is a monopoly whose anti-competitive practices harm Americans.
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