US federal and state antitrust agents filed a lawsuit against Facebook on Wednesday alleging that the social media giant abused its dominant position with its acquisitions of the messaging services Instagram and WhatsApp.
Separate lawsuits filed by the Federal Trade Commission and a coalition of state officials called for the divestment of Instagram and WhatsApp, services that have billions of users and are part of the Facebook “family” of applications.
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” said Ian Conner, director of the FTC’s Office of Competition.
“Our goal is to reverse Facebook’s anti-competitive behavior and restore competition so that innovation and free competition can flourish.”
State antitrust agents from 48 states and US territories have filed a separate legal action.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and end competition, all at the expense of everyday users,” said New York State Attorney General Letitia James, who lead the coalition.
“Facebook used its power to suppress competition so it could take advantage of users and earn billions by turning personal data into a source of income.”
The lawsuits allege that Facebook sought to crush competition by acquiring the messaging apps: Instagram in 2012 and WhatsApp in 2014.
The action heralds a fierce legal battle that seeks to force Facebook to ditch the applications that have become an increasingly important element of the Californian giant’s business model and embedded in its technology.
Facebook said it would offer a detailed answer after reviewing the cases, but added: “Years after the FTC authorized our acquisitions, the government now wants a revamp regardless of the impact the precedent would have on the broader business community or in people. who choose our products every day ”.
– Data advantages –
The case is likely to depend not only on Facebook’s share of social media users, but also on the vast amount of data it collects from some three billion users worldwide.
“Facebook has been spending its time monitoring users’ personal information and taking advantage of it,” said James.
“No company should have so much power without control over our personal information and our social interactions.”
Tiffany Li, a Boston University law professor who studies the sector, said that while Facebook has rivals competing for the attention of Internet users, it has a huge advantage because of its access to data.
“A company that owns multiple platforms is not, in itself, necessarily a barrier to competition,” Li said on Twitter.
“However, a company that has sole ownership of large amounts of user data, with no potential for interoperability or access to competition, can be anti-competitive.”
Li added that startups “have an uphill battle to reach users because of network effects, even if they have better products.”
The FTC announced earlier this year that it would review acquisitions made by five Big Tech firms over the past decade, opening the door to a wave of potential antitrust investigations.
The consumer protection agency said it would review deals made by Amazon, Apple, Facebook, Microsoft and Google’s parent Alphabet since 2010 amid growing complaints about technology platforms that have dominated key economic sectors.
The US Department of Justice, which shares antitrust enforcement with the FTC, sued Google parent Alphabet in October, accusing the Silicon Valley giant of maintaining an “illegal monopoly” on online search and advertising. and opening the door to a possible breakup. Eleven US states joined that case.
Scrutiny has been mounting for large tech companies that have extended their dominance in recent years, including during the global pandemic, as more people turn to internet platforms for goods and services.