Federal regulators and more than 45 state prosecutors accused Facebook facing legal action to buy rivals and stifle competition in the social media company.
The proceedings are one of the most important legal proceedings against the firm taken by the US Government.
Officials ask the court to consider dividing Instagram and WhatsApp, the company which also owns it. Facebook said regulators approved the agreements under scrutiny years ago.
The Facebook General Counsel Jennifer Newstead said The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,”
She told us that the company had invested millions to successfully implement Instagram and WhatsApp and defend themselves “vigorously”
“Consumer protection and innovation protection laws exist to prevent successful enterprises from punishing them,” said Facebook, describing arguments made by the government as ‘revisionist history.’
We're reviewing the complaints & will have more to say soon. Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day.
— Facebook Newsroom (@fbnewsroom) December 9, 2020
The state and Federal Trade Commission (FTC) proceedings focus on the 2012 Instagram acquisition, 2014 WhatsApp purchase, and rules applicable to software developers outside the Facebook market.
Officials accused Facebook of “buy or bury” potential competitors, competitors, and users who lost control of the company’s own publicity revenue.
Legal submissions quote Facebook boss Mark Zuckerberg internal messages, such as an e-mail in 2008 which states it is “better to buy than compete”
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” said New York Procurator General Letitia James.
“This is why we take action today.” “We should have no company so strongly unchecked power over personal and social interactions.”
Sometimes it’s quite difficult to understand how huge Facebook is.
All owned by Facebook are over one trillion Facebook, Facebook Messenger, WhatsApp, and Instagram.
There are over two billion WhatsApp and Facebook.
The Federal Trade Commission (FTC) argues that there is a reason why this highly lucrative sector has dominated Facebook – it has illegally gained the competition.
In 2012, Instagram grew fast. It was worried about Facebook. Instagram was a competitor to Facebook before Zuckerberg admitted himself.
It was purchased, a $1 billion figure that now looks absurdly low. WhatsApp grew at unbelievable speeds in 2014 as well. Was the Facebook messenger service going to be threatened?
WhatsApp has also been bought by Facebook. The FTC had previously examined and approved both these acquisitions.
This is Facebook’s argument – that when they were much smaller, they bought those companies – that their success was not prescribed. Do not punish the building-up of strong US companies on Facebook in other words.
It will now be decided in the courts whether Instagram and WhatsApp can be cleared from Facebook – and these antitrust lawsuits take time. There are also plenty of opportunities for appeals. Don’t anticipate Facebook’s breakdown soon.
However, this shows yet more where the courts and politicians are now headed. In many people’s eyes, Big Tech is a little too large – and it must decrease in size Facebook facing legal action.