*The U.S. government and more than 40 states have sued Facebook over its acquisitions of Instagram and WhatsApp, claiming the popular social media platform engages in illegal tactics to crush competitors.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” New York State Attorney General Letitia James announced in a press conference. “Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance.”
Here’s more from CNN:
The Federal Trade Commission, in particular, is seeking a permanent injunction in federal court that could, among other things, require the company to divest assets, including Instagram and WhatsApp, effectively breaking up Facebook as we know it. The states are also calling for the company to be broken up, if necessary.
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“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.”
Facebook CEO Mark Zuckerberg testified at an antitrust hearing in Congress over the summer, during which emails surfaced between him and Facebook’s then-CFO David Ebersman about the purchase of Instagram.
“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale,” Zuckerberg said. In a follow-up email from Zuckerberg noted “didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way.”
So, what’s at the heart of this lawsuit?
As reported by the New York Times, “There’s a legal reason Instagram and WhatsApp are at the heart of the state and federal lawsuits. Trying to reduce competition by purchasing rivals is an explicit violation of America’s antitrust laws. That’s exactly what government lawyers say Facebook did and will keep doing,” the publication writes.
How will the lawsuits affect people who use Facebook?
The Times report goes on to note that “Lawsuits like this might take years to resolve. Your experience with Facebook, Instagram, WhatsApp or Messenger won’t suddenly be different tomorrow.”
The Facebook lawsuits are fully explained here.
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