Facebook is facing two major antitrust lawsuits filed by the U.S. government and 48 states demanding, among other things, that the tech giant divest itself of Instagram and WhatsApp.
Both suits allege that Facebook has become a social media monopoly by illegally suppressing competition when it buys potential rivals. Facebook purchased photo-sharing platform Instagram for $1 billion in 2012 and chat service WhatsApp for $19 billion in 2014. Now, they are three of the world’s most popular social media and messaging apps. Altogether as a company, Facebook is valued at more than $800 billion.
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In the suits, state and Federal Trade Commission officials are seeking an injunction that could force Facebook to divest assets, including Instagram and WhatsApp, and seek prior approval for future deals.
“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 Attorney General Letitia James of New York, who led the states' investigation.
"Personal social networking is central to the lives of millions of Americans," said Ian Conner, Director of the FTC's Bureau of Competition, 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."
CEO Mark Zuckerberg has previously called a breakup of the company an “existential” threat. And the Twitter account for the company's communication arm blasted the decision.
"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," the company tweeted.
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.December 9, 2020
In a lengthy statement posted this evening (Dec. 9), Facebook accused the FTC and the participating attorneys general of practicing "revisionist history."
The legal action come on the heels of growing scrutiny of Facebook and Big Tech in general. The FTC previously investigated Facebook's data practices after the 2017 scandal involving Cambridge Analytica; the tech giant was forced to pay a $5 billion penalty.
Google is facing its own antitrust lawsuit filed by the Department of Justice and 11 states. Apple is paying $113 million to settle a suit over its "Batterygate" controversy, and the European Union is investigating the company's App Store as well Apple Pay mobile payments.. And a major congressional report recently found that Big Tech companies wield "monopoly power" and condemned their anticompetitive practices.