The Federal Trade Commission (FTC), along with Attorneys-General from 48 states, have reportedly filed antitrust lawsuits against Facebook on Wednesday (9 December).
They have also sought a permanent injunction “and other equitable relief” from a federal court against the social media giant to divest its assets, which include social media platform Instagram and instant messaging app WhatsApp.
Facebook bought Instagram for US$1 billion in 2012 and acquired WhatsApp in 2014 for around US$22 billion.
FTC stated in its lawsuit that Facebook had used its dominance in the digital marketplace by “buying up companies that present competitive threats” and ”by imposing restrictive policies that unjustifiably hinder actual or potential rivals” that it does not acquire.
Ian Conner, director of the FTC’s Bureau of Competition, said that FTC aims to “roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive”.
NBC reported that the states have also filed their lawsuit against Facebook and called for the court to halt the company’s anticompetitive behaviour, as well as any other action that the court deemed suits.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” said New York Attorney-General Letitia James.
“Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance,” she added.
Ms James noted that the states’ lawsuit against Facebook was directed to both the company’s past acquisitions of rivals and treatment of competitor apps.
The House of Representatives’ antitrust subcommittee cited emails from Facebook CEO Mark Zuckerberg in 2012, which allegedly evidenced the company’s anti-competitive behaviour, as reported by The Verge.
Mr Zuckerberg reportedly wrote in the email: “One way of looking at this is that what we’re really buying is time. Even if some new competitors spring 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,” he added.
He sent a follow-up reply just shortly after that, saying: “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way”.
Referencing to the second email, antitrust lawyers noted that Mr Zuckerberg seems to realize that his first email has indicated that his acquisition strategy constituted anti-competitive behaviour.
In response to the lawsuits, Facebook argued that the FTC had previously approved the company’s Instagram and WhatsApp acquisitions.
“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,” tweeted Facebook on Thursday.
Facebook added that it is reviewing the two lawsuits and that it “will have more to say soon”.
