On Wednesday, the federal government and 48 attorneys-general filed twin lawsuits against Facebook to effectively smash the tech giant and curb possible business practices.
The Federal Trade Commission and lawyers from 46 states, the District of Columbia and Guam are questioning Facebook’s purchase of Instagram and WhatsApp in 2012 and 2014, respectively. The lawsuits also aim to compel Facebook to inform the federal government of any potential acquisitions $10 million or more.
“Personal social networking is central to the lives of millions of Americans,” FTC Bureau of Competition Director Ian Conner said in a statement. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
The potential forced unloading of Instagram and WhatsApp is a “existential” threat to the social media giant, Facebook CEO Mark Zuckerberg said. Facebook harassed authorities, accusing them of trying to retroactively block mergers that had been approved years ago.
“The most important fact in this case, which the commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago,” Facebook general counsel Jennifer Newstead told The New York Times in a statement. “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”
The lawsuits claim that Facebook’s purchase of Instagram for $1 billion in April 2012 and WhatsApp for $19 billion in February 2014 represented aggressive and monopolistic behavior, choosing to take over budding competitors rather than innovating and competing. The lawsuits further allege that Facebook is engaged in anti-competitive practices, using access to its interface to either stifle competition growth or ensure that other software developers do not compete with Facebook.
Facebook’s acquisitions have been key to its explosive growth over the past decade.
As the Times reports:
Since those deals, Instagram and WhatsApp have skyrocketed in popularity, giving Facebook control over three of the world’s most popular social media and messaging apps. The applications have helped catapult Facebook from a company started in a college dorm room 16 years ago to an internet powerhouse valued at more than $800 billion.
The move to break up Facebook comes several months after the Department of Justice filed an antitrust lawsuit against Google, accusing the tech giant of anti-competitive and monopolistic behaviour.