Federal Trade Commission suit threatens breakup of Facebook
The Federal Trade Commission is calling Facebook an “illegal” monopoly, claiming the company has engaged in anti-competitive activity in its acquisition of WhatsApp and Instagram. The case has the potential to break up Facebook, a goal that many of its harshest political rivals have sought.
On Thursday, the federal regulatory body delivered the highly anticipated case against Facebook, which has been under scrutiny for more than a year by regulators and lawmakers across the U.S. “Personal social networking is central to the lives of millions of Americans,” said Ian Conner, director of the FTC’s Bureau of Competition, in the announcement. “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 FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions,” the complaint said.
Second antitrust case
Facebook issued its first reaction in a statement on Twitter: "We're reviewing the complaints and will have more to say soon," Facebook said. "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."
This becomes the second high-profile antitrust case to come out of Washington this year. In October, the Department of Justice pushed a case against Google over its search dominance.
The complaint against Facebook touches on why the company bought Instagram in 2012 and WhatsApp in 2014. There have been concerns those acquisitions were driven by a strategy to buy out the competition in social media.
The FTC’s complaint also discusses how Facebook has used its platform to put rivals at a disadvantage. The complaint mentions Vine, which Twitter owned. Facebook had a reputation for blocking rivals from using some of its most sophisticated tools related to ads and data.
The FTC complaint was joined by 48 states, which could give it staying power in the next administration, when President-elect Joe Biden takes over the White House and control of FTC appointments.