The US Federal Trade Commission (FTC) is suing Facebook for allegedly practicing social media monopoly and is asking the social network giant to let go of Instagram and WhatsApp.
The FTC announced it has initiated the filing of a lawsuit against Facebook for alleged social media monopoly. The regulator also asked the court to order the social network giant to divest its Instagram and WhatsApp messaging services. The regulator also revealed it has teamed up with the District of Columbia, 46 other states, and the territory of Guam in suing Facebook for alleged illegal social networking monopoly for many years through its anticompetitive conduct and practices.
FTC Accuses Facebook of Social Media Monopoly, Calls for Divestiture of Instagram and WhatsApp https://t.co/FTVA0xxGUr by @julipuli pic.twitter.com/zBOYE6YAbf — MacRumors.com (@MacRumors) December 9, 2020
The FTC, along with New York Attorney General Letitia James, announced the filing of the antitrust lawsuits on Wednesday. "It's really critically important that we block this predatory acquisition of companies and that we restore confidence to the market," said James in a press conference. The FTC also accused Facebook of engaging in a "systematic strategy" that seeks to get rid of threats to its social media monopoly. These include the social network giant's acquisition of Instagram in 2012 and the subsequent purchase of WhatsApp in 2014. The FTC is asking the court to order Facebook to divest itself of Instagram and WhatsApp.
According to the FTC, Facebook's actions in acquiring Instagram and WhatsApp harmed competition. It also left users with limited options for personal social networking and denied advertisers of the benefits of competition. The regulator stated that the act of the social network giant in purchasing Instagram and WhatsApp have the effect of crushing its competition, allowing Facebook to have social media monopoly.
In its lawsuit, the FTC is asking for a permanent injunction that would require Facebook to divest itself of several assets, including Instagram and WhatsApp. This means that for the social network giant to shake off any appearance of engaging in social media monopoly, it has to sell Instagram and WhatsApp. The regulator is also asking the court to require Facebook to seek government approval first before going into mergers and acquisitions, as well as prohibiting the social network company from imposing anticompetitive policies and conditions on software developers.
In a statement, Ian Conner, FTC's Bureau of Competition Director, said that personal social networking is important to millions of Americans. "Facebook's actions to entrench and maintain its social media monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook's anticompetitive conduct by asking it to divest Instagram and WhatsApp to restore competition. This way, innovation, and free competition can thrive," Conner said. The FTC, in its complaint, stated that Facebook at first tried to compete with Instagram but eventually, it opted to acquire the social network platform, neutralizing whatever threat it presents to Facebook. In the case of WhatsApp, Facebook saw the success of WhatsApp as a mobile messaging app and its potential to enter the social networking market, which is why the social network giant acquired it.
