Facebook is facing two different lawsuits in the US that could result in the sale of its two other platforms, Instagram and WhatsApp.
The US Federal Trade Commission together with a number of States has accused the giant social network of engaging in unfair practices to “stifle competition, degrade personal privacy, and crush rivals.”
The company is also accused of suppressing innovation and monetizing data while cutting off privacy protections.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” New York Attorney General Letitia James said at a press conference announcing the action.
“By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived as potential threats.”
The suit further states that Facebook has abused its market dominance through its strategy to kill off competitors and punishing those who refuse to be bought
Facebook’s 2012 acquisition of Instagram and its 2014 purchase of WhatsApp as key examples of its alleged anticompetitive behavior.
The suit is seeking to have the court stop Facebook from carrying on with what it terms as illegal behaviour. It also wants the social network’s freedom to acquire new businesses curtailed and to potentially force it to sell off some of its major assets including Instagram and WhatsApp.
The states attorneys general asked the courts to impose a requirement for Facebook to seek their approvals for acquisitions valued at $10 million and above.
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” said Ian Conner, director of the FTC’s Bureau of Competition, “Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
Facebook responded through a statement by its Vice President and General counsel Jennifer Newstead, terming the allegations as “revisionist history”
“Instagram and WhatsApp became the incredible products they are today because Facebook invested billions of dollars, and years of innovation and expertise, to develop new features and better experiences for the millions who enjoy those products,” she said.
“The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago. The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”
The company said it would however review the complaints.
Tech giants have enjoyed a boom this year despite the financial hitches worldwide brought about by the Covid-19 pandemic. More investors are betting their money on a seemingly unshakeable business model that is growing in the face of work from home advisories.
Unfortunately, their success has made way for a lot of scrutiny resulting in lawsuits for a number of Tech companies.
Google is facing a similar lawsuit over allegations that it uses its monopoly to trump over its rivals online.