US lawsuits could force Facebook to sell Instagram and WhatsApp
The social network accuses the FTC of having "no regard for settled law" in bid to break the company up
Facebook has been hit by two major antitrust lawsuits which claim the social network squashed competition by acquiring smaller companies like Instagram and WhatsApp.
The suits were filed on Wednesday by the Federal Trade Commission (FTC) and 48 state attorneys general, and are seen as the first move to break the digital giant up. Both suits are seeking remedies for the alleged anticompetitive conduct that could result in requiring Facebook to divest the two services.
Facebook responded with a strongly worded blog post suggesting that no US antitrust enforcer has ever brought up a case like this "for good reason". The company also pointed out that the FTC "correctly" allowed deals for Instagram and WhatsApp to move forward because "they did not threaten competition".
The $1 billion acquisition of Instagram in 2011 is of particular concern to the FTC as it claims Facebook used its power and reach to stifle the growth of a competing service.
"For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition," New York Attorney General Letitia James said. "Facebook used vast amounts of money to acquire potential rivals before they could threaten the company's dominance."
Facebook pointed out that the FTC stood by for years while it poured billions of dollars into both Instagram and WhatsApp and that it has "seemingly no regard for settled law or the consequences to innovation and investment".
"The FTC conducted an in-depth 'Second Request' of the Instagram transaction in 2012 before voting unanimously to clear it," Jennifer Newstead, Facebook's VP and general counsel wrote in a blog post.
"The European Commission reviewed the WhatsApp transaction in 2014 and found no risk of harm to competition in any potential market. Regulators correctly allowed these deals to move forward because they did not threaten competition.
"Now, many years later, with seemingly no regard for settled law or the consequences to innovation and investment, the agency is saying it got it wrong and wants a do-over. In addition to being revisionist history, this is simply not how the antitrust laws are supposed to work."
B2B under quarantine
Key B2C e-commerce features B2B need to adopt to surviveDownload now
The top three IT pains of the new reality and how to solve them
Driving more resiliency with unified operations and service managementDownload now
The five essentials from your endpoint security partner
Empower your MSP business to operate efficientlyDownload now
How fashion retailers are redesigning their digital future
Fashion retail guideDownload now