WASHINGTON – The Federal Trade Commission and more than 40 states on Wednesday accused Facebook of becoming a social media monopoly by buying its rivals for illegal squash competition, stating that deals that would make the social network behemoth must be dismantled have been changed.
Federal and state regulators, who have been investigating the company for more than 18 months, have said in separate lawsuits that Facebook’s purchases, particularly Instagram in 2012 for $ 1 billion and WhatsApp for $ 19 billion two years later, have eliminated competition, which could one day have challenged the company’s dominance.
Since those agreements, the popularity of Instagram and WhatsApp has skyrocketed, allowing Facebook to control the world’s three most popular social media and messaging apps. The apps helped Facebook catapult Facebook from a company that headed a college dormitory 16 years ago toward an Internet power plant worth more than $ 800 billion.
Prosecutors have called on Facebook to discontinue Instagram and WhatsApp, as well as a new restriction on future transactions.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and stifle competition, all to the detriment of everyday users,” said Letitia James, New York’s chief prosecutor, who led the company’s multi-level investigation in parallel with the federal agency.
Lawsuits filed in the U.S. District Court for the District of Columbia highlight the growing bipartisan and international tsunami against Big Tech. Lawmakers and regulators have zeroed in on the grip that Facebook, Google, Amazon and Apple maintain in commerce, electronics, social networking, search and online advertising, transforming the country’s economy. President Trump has repeatedly argued that technology giants have too much power and influence, and allies of President-elect Joseph R. Biden Jr. are making similar complaints.
The investigations have already led to a lawsuit filed by the Department of Justice two months ago against Google, which accuses the search giant of illegally protecting the monopoly. At least one more lawsuit is expected against Google by the end of the year, from both Republican and Democratic officials. In Europe, regulators are proposing stricter laws against industry and have imposed billions of dollars for violating competition laws.
Lawsuits against Facebook are expected to launch a long legal battle. The company has long denied illegal anti-competitive behavior and is expected to protect its deep money. Few major antitrust cases focus on mergers approved years earlier. The FTC has signed Facebook Instagram and WhatsApp deals under the Obama administration.
If prosecutors succeed, cases can transform the company that is so experienced only unlimited growth. Facebook CEO Mark Zuckerberg described the company’s disintegration as an “existential” threat.
The case is also widely monitored as a yardstick for future mergers in the technology industry, which will continue to flourish even during a pandemic. Last month, Facebook announced it would buy Kustomer, a customer relationship management company, for nearly $ 1 billion.
Facebook did not respond immediately to the request for comments, but has argued in the past that the social media market has remained competitive. TikTok, the skyrocketing growth of China’s short video sharing app and a popular social media company among conservatives, Parler’s new growth shows that Facebook has no lockout on social networks, the company said.