SULAIMANI (ESTA) — Facebook Inc could be forced to sell its prized assets WhatsApp and Instagram after the U.S. Federal Trade Commission and nearly every U.S. state filed lawsuits against the social media company.
The U.S. Federal Trade Commission and New York Attorney General Letitia James asked Wednesday for Facebook to be ordered to divest its Instagram and WhatsApp messaging services.
The complaints accuse Facebook of buying up rivals, focusing specifically on its previous acquisitions of photo-sharing app Instagram for $1 billion in 2012 and messaging app WhatsApp for $19 billion in 2014, Reuters said.
With the filing of the twin lawsuits on Wednesday, Facebook becomes the second big tech company to face a major legal challenge this year after the U.S. Justice Department sued Alphabet Inc’s Google in October, accusing the $1 trillion company of using its market power to fend off rivals.
Reuters reported that the lawsuits highlight the growing bipartisan consensus to hold Big Tech accountable for its business practices and mark a rare moment of agreement between the Trump administration and Democrats, some of whom have advocated breaking up both Google and Facebook.
“It’s really critically important that we block this predatory acquisition of companies and that we restore confidence to the market,” the New York attorney general said during a press conference.
The lawsuit accuses Facebook of anti-competitive conduct and using its market dominance to harvest consumer data and reap a fortune in advertising revenues.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users,” James said on behalf of the coalition of 46 states, Washington, D.C. and Guam.
Alabama, Georgia, South Carolina and South Dakota did not participate in the lawsuit, according to Reuters.
Facebook’s general counsel Jennifer Newstead called the lawsuits “revisionist history” and said antitrust laws do not exist to punish “successful companies.” She said WhatsApp and Instagram have succeeded after Facebook invested billions of dollars in growing the apps.
“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” Reuters quoted Newstead as saying.
The lawsuits are the biggest antitrust cases in a generation, comparable to the lawsuit against Microsoft Corp in 1998. The federal government eventually settled that case, but the years-long court fight and extended scrutiny prevented the company from thwarting competitors and is credited with clearing the way for the explosive growth of the internet.
(Esta Media Network/Agencies)
