Facebook may be in big trouble. The US Federal Trade Commission (FTC) has sued Facebook for allegedly violating antitrust laws. If the lawsuit goes in the FTC's favor, the Facebook family of apps may be forced to break up.
Facebook Gets Slammed With Major Lawsuits
The FTC announced that it is suing Facebook in a press release on the official FTC site. 47 state attorneys general are also suing the social media giant.
An investigation by the agency found that Facebook is actively trying to crush its competition by buying up-and-coming apps that threaten its relevance. In turn, these actions have deprived users of choices for social networks, and have created a social media monopoly.
Facebook acquired Instagram in 2012, and later purchased WhatsApp in 2014. The FTC is claiming that Facebook bought these rival networks "to eliminate threats to its monopoly."
In the court documents on the FTC's website, the FTC points out the alleged anticompetitive behavior that motivated Facebook to buy Instagram, saying:
Mr. Zuckerberg recognized that by acquiring and controlling Instagram, Facebook would not only squelch the direct threat that Instagram posed, but also significantly hinder another firm from using photo-sharing on mobile phones to gain popularity as a provider of personal social networking.
As for the $19 billion WhatsApp acquisition, the FTC believes that Facebook also "responded to the competitive threat by acquiring it." The FTC even found that Mark Zuckerberg, Facebook's CEO, clearly stated that "it is better to buy than compete" in a private email.
In turn, the FTC is hoping for a permanent injunction that may "require divestitures of assets, including Instagram and WhatsApp."
Facebook's Response to the Lawsuit
Facebook quickly responded to the lawsuits in a post on the About Facebook blog. Jennifer Newstead, the general counsel at Facebook, denounced the lawsuits, saying that they are "revisionist history."
Newstead defends Facebook's decision to purchase WhatsApp and Instagram, saying that both "transactions were intended to provide better products for the people who use them, and they unquestionably did."
She also notes that both purchases were, in fact, reviewed by antitrust regulators and were approved. Newstead goes on to criticize the FTC for wanting a "do-over" on its initial approval, and that the lawsuit "risks sowing doubt and uncertainty about the US government's own merger review process."
Will This Be the End of the Facebook Family?
Facebook and its family of apps have often been criticized in the past, but it now faces a very real threat. The FTC may force Facebook to split up with WhatsApp and Instagram, which could have unprecedented consequences on users, as well as Facebook itself.
