Federal government and general prosecutors of 46 states insist on forced separation of Facebook company
The federal and 46 state governments on Wednesday filed a class action lawsuit against Facebook, accusing the company of abusing its leading position in the social media market in order to suppress its competitors. The plaintiffs, among other things, are pressing the court to force Facebook to get rid of the WhatsApp messenger and the social network Instagram controlled by the company.
The antitrust lawsuits against Facebook, announced today by the Federal Trade Commission (FTC) and New York State Attorney General Leticia James, are the second round of government action against previously seemingly untouchable technology giants. Recall that in October this year the Department of Justice filed a lawsuit against Google for abuse of its dominant position in online search and advertising on the Internet.
Companies Amazon and Apple are also under investigation by Congress and the federal authorities on charges of infringement of competitors. The New York City Attorney General said at a press conference on Wednesday that it was necessary “to stop the unnecessarily aggressive takeover practices and restore confidence in the market.
The Federal Trade Commission believes that Facebook is systematically eliminating competitors by simply buying small and promising companies, as it happened with Instagram in 2012 and WhatsApp in 2014.
According to Leticia James, Facebook “uses its monopoly to eliminate smaller rivals and suppress competitors at the expense of ordinary users.
The Commission in 2019 fined Facebook $5 billion for violating user privacy and introduced new control rules and restrictions on the company. The largest fine that the FTC has ever imposed on technology companies has had little impact on Facebook.
Representatives of Facebook called the actions of the authorities “revisionism” and said that the government punishes successful business, recalling that it was FTC several years ago gave the company permission to buy Instagram and WhatsApp.
“Facebook” is the largest social network in the world, which has about 2.7 billion users. The market value of the company is estimated at 800 billion dollars, CEO Mark Zuckerberg is among the Top 5 richest people in the world. James said that Facebook, among other things, practiced opening a website to third party app developers, and then suddenly turned off those who the company considered a threat to its monopoly position in the market.
In a lawsuit filed on behalf of the authorities in 46 states, Guam Island and the District of Columbia, Facebook is accused of suppressing competitors and using its dominant position in the market to collect consumer data and derive super revenue from advertising.
North Carolina Attorney General Josh Stein believes a lawsuit against Facebook could make a fundamental difference to the social networking market, as it did to the telephone market in the early 1980s when AT&T’s monopoly in the industry was forcibly dissolved by court order.
“We hope to restructure the social media market in the United States, which now has only one player,” Stijn told reporters. James added that the state and territory coalition worked in conjunction with the Federal Trade Commission, but the prosecution was separate from the FTC investigation.
The DOJ lawsuit against Google, filed just two weeks before the presidential election day, triggered charges of political motivation as it was initiated by U.S. Attorney General William Barr, a longtime ally of President Donald Trump, who often criticized Google. The FTC is an independent regulator with three Republicans and two Democrats on its board.
President-elect Joe Biden has previously stated the need to consider possible disaggregation of technology giants. Biden described Mark Zuckerberg as “the real problem.
Over the past 15 years, Facebook has absorbed, in addition to Instagram and WhatsApp, about 70 companies. The company has paid a billion dollars for the social network Instagram. At that time, the application for publishing photos and short videos had about 30 million users, and it did not bring income. Several years later Facebook bought WhatsApp messenger for 19 billion dollars.
Zuckerberg previously promised that the two companies will work independently of each other, but over the years, all three services have integrated with each other. Now users can link their accounts and share content on all platforms owned by Facebook. Such close integration can make it difficult for Facebook to separate its business. “Instagram is now used by over a billion people around the world.