U.S. and States Say Facebook Illegally Crushed Competition

U.S. and States Say Facebook Illegally Crushed Competition

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WASHINGTON — The Federal Trade Commission and 48 states accused Facebook on Wednesday of becoming a social media monopoly by illegally squashing competition by buying up its rivals, setting up fierce legal confrontations that could dismantle some of the world’s most popular communication services.

Federal and state regulators, who have been investigating the company for over 18 months, said in separate lawsuits that Facebook’s purchases, especially Instagram for $1 billion in 2012 and WhatsApp for $19 billion two years later, eliminated competition that could have one day challenged the company’s dominance.

Since those deals, Instagram and WhatsApp have skyrocketed in popularity, giving Facebook control over three of the world’s most popular social media and messaging apps. The applications have helped catapult Facebook from a company started in a college dorm room 16 years ago to an internet powerhouse valued at more than $800 billion.

The prosecutors called for Facebook to unwind Instagram and WhatsApp and for new restrictions on future deals.

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” said Attorney General Letitia James of New York, who led the multistate investigation into the company in parallel with the federal agency.

The lawsuits underscores the growing bipartisan and international tsunami against Big Tech. Lawmakers and regulators have zeroed in on the grip that Facebook, Google, Amazon and Apple maintain on commerce, electronics, social networking, search and online advertising, remaking the nation’s economy. President Trump has argued repeatedly that the tech giants have too much power and influence, and allies of President-elect Joseph R. Biden Jr. make similar complaints.

The investigations already led to a lawsuit against Google, brought by the Justice Department two months ago, that accuses the search giant of illegally protecting a monopoly. At least one more suit against Google, by both Republican and Democratic officials, is expected by the end of the year. In Europe, regulators are proposing tougher laws against the industry and have issued billions of dollars in penalties for the violation of competition laws.

The lawsuits against Facebook is expected to set off a long legal battle. The company has long denied any illegal anticompetitive behavior and is expected to use its deep well of money to defend itself. Few major antitrust cases have centered on mergers approved years earlier. The F.T.C. signed off on Facebook’s deals for Instagram and WhatsApp during the Obama administration.

If the prosecutors succeed, the cases could remake the company, which has only experienced unfettered growth. Mark Zuckerberg, Facebook’s chief executive, has described a breakup of the company as an “existential” threat.

Hafta Ichi
Source: The NY Times
Keyword: U.S. and States Say Facebook Illegally Crushed Competition

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