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Facebook sued by US govt over its buying of WhatsApp and Instagram, harming competition

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facebook sued by US and antitrust bodies

The Federal Trade Commission sued Facebook on Wednesday for anti-competitive conduct. The Commission said in a statement that Facebook is illegally maintaining its personal social networking monopoly through a years-long course of anti-competitive conduct.

New York Attorney General Letitia James announced the social media giant has harmed competition by buying up smaller companies like Instagram and WhatsApp to squash the threat they posed to its business.

This is second major case filed against a social media giant in the recent times. The Department of Justice has filed a lawsuit against Google, where it has proposed breaking up of the Big Tech company. The investigation into Facebook is a part of the larger antitrust scrutiny on Big Tech in the country. The legislative branch of the government has questioned Big Tech CEOs in high-profile hearings in recent months. Subsequently, the Judiciary Committee of the House of Representatives had recently called for a radical overhaul of antitrust law in the country.

The company has been pressed with charges that say that Facebook wants to dominate the whole market and doesn’t allow any competition flourish. It is to be noted here that Mark Zuckerberg once mentioned in an interview in 2008,”it’s better to buy than to compete”.

To maintain the dominance in the social media market, the CEO of Facebook bought WhatsApp for $19 billion. This deal had made them enjoy monopoly for a long long time.

Facebook paid a whopping amount of $1 billion for buying Instagram in 2011.

Buying the two social media giants have landed Facebook in a legal case for illegally capturing competition.

For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition.

In a newsroom statement, Facebook said both acquisitions had been cleared by regulatory agencies. “Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day,” the company said.

In one of the emails by the CEO of Facebook, he stated, “One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”

Quickly in another email he wrote, “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,”

The antitrust lawyers could judge the hidden guilt in the emails.

It is quite notable that the creators of both the apps; WhatsApp and Instagram; have left Facebook.

Some on a positive note and some with silent exit.

The FTC further alleged that Facebook not only acquired its biggest threats in the market, it had also imposed anti-competitive behaviors against the third-party software. As per the complaint, Facebook has made key “APIs available to third-party applications only on the condition that they refrain from developing competing functionalities, and from connecting with or promoting other social networking services.”

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