Regulators filed a lawsuit claiming that the corporate features a monopoly on social networking and will divest itself of Instagram and WhatsApp.
What happened:
The US Federal Trade Commission has filed an antitrust lawsuit against Facebook for its “anticompetitive conduct and unfair methods of competition.” Which has its 2012 acquisition of Instagram and 2014 acquisition of WhatsApp. Facebook, the FTC alleges, features a monopoly on social networking.
“Since toppling early rival My Space and achieving monopoly power. Facebook has turned to play defense through anticompetitive means,” the FTC wrote in its suit. “After identifying two significant competitive threats to its dominant position—Instagram and WhatsApp—Facebook moved to squelch those threats by buying the businesses, reflecting CEO Mark Zuckerberg’s view, expressed during a 2008 email, that ‘it is best to shop for than compete.’”
How we got here:
Facebook has been under increased regulatory scrutiny within the US since 2017. When news reports revealed that the political data firm Cambridge Analytica had harvested Facebook user data without consent within the lead-up to the 2016 US presidential election.
The FTC started its probe into Facebook’s privacy policies in March 2018, which resulted in a Dollar 5 billion fine. While this is the most important fine ever apportioned to a technology company. It still represented only about 9% of the company’s 2018 revenue. And roundly criticized by advocacy organizations and Democratic lawmakers. Because it didn’t accompany conditions that required Facebook to form any changes to its business practices.
In recent months, the scrutiny has been increasing. Over the summer, House Democrats published a 449-page report on Apple, Amazon, Facebook, and Google’s monopolistic practices, asserting increased enforcement of antitrust law.
Then, in October, the Department of Justice filed an antitrust suit against Google, arguing that the corporate used unlawful methods to expand its search and advertising business.
Why it Matters:
The DOJ suit against Google already the foremost significant monopoly case filed in 20 years. And therefore the twin lawsuits from the FTC and states are, at the very least, on par.
Today’s action, which joined a separate lawsuit from 47 US states also as Guam. And therefore the District of Columbia, has big repercussions for Facebook. And will force it to unload Instagram and WhatsApp. But it also portends a broader environment that’s increasingly critical of the dominance of a couple of technology giants.
It could take years for these cases to form their way through the courts, but more lawsuits are coming. State attorneys general have said that they’re going to be filing their own lawsuits against Google within the coming weeks. Also as continuing additional scrutiny of Amazon and Apple.
