What you need to know
- The Federal Trade Commission has filed litigation against Facebook after a year-long investigation.
- Facebook is alleged to have practiced anticompetitive behavior by purchasing Instagram and WhatsApp, companies that Facebook's executives were threatened by.
- The lawsuits call for Facebook to divest both Instagram and WhatsApp.
The FTC today filed litigation against Facebook on the grounds that it has practiced anticompetitive behavior. The claims by the FTC allege that Facebook has managed to maintain a monopoly that began with the company's acquisition of Instagram in 2012, followed by its purchase of WhatsApp in 2014. The lawsuits call for Facebook to strip ownership of both applications and would require regulatory approval for any future acquisitions.
The complaints surrounding Facebook's conduct allege that it would purchase companies that it felt threatened by, stating that it would rather buy other popular apps than compete with them. According to an investigation by a House Judiciary subcommittee, Facebook was worried about Instagram's popularity, and Instagram's co-founder, Kevin Systrom, was worried that Mark Zuckerberg would go into "destroy mode" if they didn't sell. Similarly, Facebook's executives were allegedly worried about the success of "over-the-top" messaging apps like WhatsApp and how they affected the company's leadership position.
Facebook is also alleged to have imposed an anticompetitive environment for software developers, requiring the use of APIs that only work with its services and discouraging any connection or promotion of any other services not related to Facebook. The FTC highlighted the now-defunct Vine app, previously owned by Twitter. Facebook had removed the API that would allow Vine users access to their Facebook friends through the app.
The FTC began its antitrust investigation against Facebook back in July of 2019, shortly after slapping the company with a $5 billion fine over its privacy dealings. New York Attorney General Letitia James, who leads the lawsuit, states that "any efforts to stifle competition, hurt small business, reduce innovation and creativity, cut privacy protections, will be met with the full force of our offices."
Facebook and Google are currently facing increased antitrust regulations in the UK.