Facebook faces multiple US lawsuits that could force sale of Instagram, WhatsApp

Tech

WASHINGTON (NewsNation Now) — The U.S. Federal Trade Commission and nearly every U.S. state sued Facebook Inc on Wednesday, saying that it broke antitrust law and should potentially be broken up.

The antitrust lawsuits were announced by the Federal Trade Commission and New York Attorney General Letitia James.

“It’s really critically important that we block this predatory acquisition of companies and that we restore confidence to the market,” James said during a news conference announcing the lawsuit.

The FTC said in a statement that it would seek an injunction that “could, among other things: require divestitures of assets, including Instagram and WhatsApp.”

In its lawsuit, the FTC is seeking the separation of the services from Facebook, saying Facebook has engaged in “a systematic strategy” to eliminate its competition, including by purchasing smaller up-and-coming rivals like Instagram in 2012 and WhatsApp in 2014. James echoed that in her news conference, saying Facebook “used its monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users.”

Facebook is the world’s biggest social network with 2.7 billion users and a company with a market value of nearly $800 billion whose CEO Mark Zuckerberg is the world’s fifth-richest individual and the most public face of Big Tech swagger. Facebook did not have immediate comment.

The U.S. Justice Department sued Alphabet Inc’s Google in October, accusing the $1 trillion company of using its market power to fend off rivals.

The lawsuits are the biggest antitrust cases in a generation, comparable to the lawsuit against Microsoft Corp in 1998. The federal government eventually settled that case, but the years long court fight and extended antitrust scrutiny prevented the company from thwarting competitors and is credited with clearing the way for the explosive growth of the internet.

Facebook shares fell as much as 3% after the news before paring losses and were last down 2%.

NewsNation obtained a statement from Facebook in response to the lawsuits:

“This is revisionist history. Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses. Instagram and WhatsApp became the incredible products they are today because Facebook invested billions of dollars, and years of innovation and expertise, to develop new features and better experiences for the millions who enjoy those products. The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago. The government now wants a do-over, sending a chilling warning to American business that no sale is ever final. People and small businesses don’t choose to use Facebook’s free services and advertising because they have to, they use them because our apps and services deliver the most value. We are going to vigorously defend people’s ability to continue making that choice.”

Jennifer Newstead, Vice President and General Counsel, Facebook

The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago. The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.

The company’s users were also quick to weigh in, where else but on social media — taking to Twitter to have their say, most of the comments harsh appraisals of the company’s business practices in line with the allegations in the lawsuits.

“All you had to do,” said one, “was not be evil.”

Another said the company has “no regard for its impact on society or democracy,” while a third said she’d get rid of Facebook in “.3 seconds if you literally had any competition.”

The Associated Press and Reuters contributed to this report

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