FTC sued Facebook alleging that the company is illegally maintaining its monopoly through a years-long course of an illegal conduct
The Competition Commission and 48
states have filed a complaint against the Californian company, accusing it of
having taken advantage of its dominant position to crush competition, in
particular through takeovers.
A titanic battle is on the horizon. The U.S. Competition Commission (FTC) and prosecutors representing 48 states and territories announced Wednesday that they have filed a complaint against Facebook, accusing it of abusing its dominant position and its well-filled coffers to squeeze out competition.
#BREAKING: @FTC today sued Facebook (FB), alleging that the company is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct: https://t.co/8ouOSM5De8 1/12 pic.twitter.com/7nvpNGnltb— FTC (@FTC) December 9, 2020
The FTC, which had already imposed a $5 billion fine on Facebook in 2019, notably demands the dismantling of the group, with a split of Instagram and WhatsApp, which was bought by Facebook in 2012 and 2014. The company has promised to respond in detail to the accusations, but recalls that the FTC had validated these takeovers.
"Crushing or Hindering" Competition
Such practices, the authorities argue, harm consumers by leaving them less choice and less protection for their private data, and harm advertisers by leaving them few alternatives for placing their advertisements.
The authorities are particularly blaming Facebook for the Instagram application buyout, in 2012 for $1 billion, and the WhatsApp messaging system, in 2014 for $22 billion. They also attack the conditions imposed by Facebook on software developers.
The FTC is therefore asking the courts to eventually force Facebook to resell Instagram and WhatsApp. The agency also wants Mark Zuckerberg's group to stop forcing developers to accept certain conditions and asks for its green light for any takeover. Prosecutors are also demanding that they be notified of any acquisition in excess of $10 million that the social network wants to make.
Race for shared messaging
The world's leading social network has always rejected accusations of monopoly, arguing that consumers have a lot of choice about how to interact online. The GAFAMs (Google, Apple, Facebook, Amazon and Microsoft) are generally in the sights of the American authorities, who suspect them of taking advantage of their dominant position to crush their competitors.
Knowing that it is threatened, Facebook has done everything it can to complicate a potential dismantling. The company recently merged Messenger, Instagram and WhatsApp messaging systems - officially for more interoperability, but in practice, this could be used as an argument to explain that a dismantling would be too complicated and would penalize Facebook too much.
Facebook is not the only Silicon Valley giant in the authorities' sights. The Ministry of Justice and eleven states launched a lawsuit in mid-October against Google, accusing the group of abusing its near-hegemony with its search engine. Similar accusations had been launched in the late 1990s against the computer group Microsoft. However, after nearly three years of legal proceedings, the Department of Justice had failed to dismantle the company.