The Federal Trade Commission (FTC) has announced that they are suing social networking giant Facebook for its monopolistic ways.
“Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategy—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers—to eliminate threats to its monopoly. This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition,” they said.
They are seeking a permanent injunction in federal court that will require divestitures of assets that includes Instagram and WhatsApp and prohibiting the company from imposing anticompetitive conditions on software developers.
“Personal social networking is central to the lives of millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
The FTC argues in its complaint that they targeted potential competitive threats to its dominance like Instagram. The complaint alleges that Facebook initially tried to compete with Instagram but Facebook chose to buy it instead of competing. They also perceived over the top messaging apps presented a threat to Facebook and Facebook’s leadership feared a successful messaging app could enter the personal social networking market.
The FTC’s complaint also alleges that Facebook has imposed anticompetitive conditions on third party software developers access to valuable interconnections on its APIs that allow devs to interface with Facebook.
This suit comes a year after the New York Attorney General, Letitia James announcing that her office was leading a group of attorneys in investigating Facebook for potential anticompetitive practices. “For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” James said yesterday.
In response to the FTC and the statements by the New York Attorney General, Facebook posted a communique on Twitter. “We’re reviewing the complaints & will have more to say soon. 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 plan by the FTC to break up Facebook is a stark contrast to what Facebook was planning to do with its platform. Last year, it was reported that they were planning to integrate WhatsApp, Messenger and Instagram Messaging and so far they have managed to merge Instagram and Messenger messaging. It also followed Mark Zuckerberg’s vision for a ‘privacy focused social network‘ where he envisioned their ecoystem to be more useful to its billions of users.