Facebook hit by massive lawsuit that could force it to sell Instagram, WhatsApp
Facebook is being sued for using its “monopoly power” to kill competition, in a move that could force it to sell Instagram and WhatsApp.
Online
Don't miss out on the headlines from Online. Followed categories will be added to My News.
Facebook has been hit with a mammoth lawsuit for allegedly using its “monopoly power” to stifle competition, in a case that could force it to offload Instagram and WhatsApp.
The social networking giant “illegally acquired competitors in a predatory manner and cut services to smaller threats”, the lawsuit filed by New York Attorney-General Letitia James alleges.
Ms James is leading a “bipartisan coalition” of Attorneys-General from 48 other states.
In their sights is Facebook’s approximately US$1 billion (A$1.34 billion) acquisition of a then-fledgling Instagram in 2012, as well as another move that appeared designed to hurt quasi-rival Twitter.
After Twitter acquired the looping video app Vine, a sort-of precursor to TikTok, and launched with it publicly, Facebook, within hours, took away its ability to let users find their Facebook friends on there.
“Yup, go for it,” Facebook boss Mark Zuckerberg allegedly replied when a company director suggested removing Vine’s ability to use Facebook’s Find Friends feature, according to the lawsuit.
RELATED: Facebook and Google will be forced to pay for news in Australia in new laws proposed this week
Similar tactics were allegedly deployed against other upstart rivals like Path and Circle.
“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,” Ms James said.
“Today, we are taking action to stand up for the millions of consumers and many small businesses that have been harmed by Facebook’s illegal behaviour.”
Facebook has responded with a brief statement that it will have more to say soon.
RELATED: ‘Invasive, creepy’ practice slammed
“Years after the (Federal Trade Commission) 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 company claimed.
In a press release from Ms James’ office announcing the lawsuit, the subject of choice also comes up.
“The elimination of competitive alternatives means users have no alternative to Facebook, fuelling its unfettered growth without competition and further entrenching its position,” it reads.
RELATED: Zuckerberg slammed by own staff
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.
— Facebook Newsroom (@fbnewsroom) December 9, 2020
It cited Instagram and WhatsApp, “both which posed a unique and dire threat to Facebook’s monopoly”, as the two “most obvious” examples.
While it is true that Facebook’s acquisition of Instagram was “cleared” and allowed to go ahead by regulators, the FTC noted “the public interest may require” reopening inquiries into Facebook’s acquisition of Instagram at a later date.
It appears that date has now arrived.
Originally published as Facebook hit by massive lawsuit that could force it to sell Instagram, WhatsApp