The U.S. Federal Trade Commission (FTC) and the attorneys general of 48 states launched an antitrust lawsuit against social media outlet Facebook on Wednesday (9), accusing the company of using illegal anti-competitive tactics to acquire or stifle competitors in order to strengthen its market leadership in the social networking space.
The FTC is seeking a permanent injunction requiring Facebook to divest its assets.
According to media reports, Facebook often eliminates competitors in their formative years by means of high-priced acquisitions, such as the acquisition of peer Instagram in 2012 and the acquisition of communications app WhatsApp in 2014, leading the public to question its monopolistic behavior.
Congress has criticized the FTC for failing to adequately review Facebook’s past acquisitions of Instagram and WhatsApp. The House Judiciary Subcommittee on Antitrust released internal documents on Facebook from its investigation of the company that show Facebook executives were once concerned about the rise of Instagram. In a letter between the CEO of Instagram and investors, he expressed concern that if he refused to sell, Facebook CEO Mark Jukerberg would enter a “state of destruction” for Instagram.
States are expected to charge that Facebook’s acquisition of Instagram and WhatsApp is a pattern of behavior that eliminates competitive threats in order to make Facebook the market leader while depriving users of privacy-protecting alternatives.
Antitrust lawsuits by states and the federal government will reportedly challenge Facebook’s acquisition of competitors and its weaponization of data. The state attorneys general in the lawsuit are expected to ask judges to consider a range of possible remedies, including pressuring Facebook to sell part of its business to address competition concerns and notifying them before making any major future transactions. The states are coordinating the lawsuit with the Federal Trade Commission (FTC). Last year, the FTC, along with the U.S. Department of Justice, launched an investigation into Facebook.
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