Two sweeping lawsuits against Facebook were filed by The Federal Trade Commission and a coalition of 48 attorneys general. Both of them have alleged the company of abusing the vast power to smother competition and maintain its position as the leading social networking platform. This is the most aggressive action that has been taken against Facebook in decades and this can lead to the complete breakup of Facebook if the government has its way.
FTC’s concern regarding Facebook’s allegations
The FTC has put forth their concern as Facebook would require unwinding its Instagram and WhatsApp mergers. Ian Conner, the director of the FTC’s Bureau of Competition said, “Personal social networking is central to the lives of millions of Americans.” He also said that the actions taken by Facebook would deny consumers the benefits of competition. He stated their aim saying the sole desire is to put out Facebook’s anticompetitive conduct and restore competition. This will thus help in restoring the innovation and striving of the free competition.
New York Attorney General Letitia James is leading the coalition of states in their suit. She has said in an official statement the states has asked the court to “halt Facebook’s anticompetitive conduct” and “provide any additional relief it determines is appropriate, including the divestiture of illegally acquired businesses and/or Facebook’s assets.”
Both the cases from the FTC and the court were announced simultaneously containing similar allegations. Filed in the Washington, D.C., federal court, both the cases are expected to be consolidated into one lawsuit further down the line.
The allegations that Facebook has been accounted for
Facebook is alleged that it violated antitrust law with its purchases of Instagram and WhatsApp. It is also called out for its unrestricted attainment of smaller companies and potential rivals. In another statement, Facebook accused the government of a “do-over” after the FTC cleared its procurements of Instagram and WhatsApp in 2012 and 2014, respectively.
Facebook has officially said, “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’s antitrust case predictably would become one of the ensnared cases in the courts for years. This is likely to happen due to the most controversial question of all time—Has Facebook harmed the consumers and distorted the market thus becoming the most popular social networking site?