The US Federal Trade Commission is taking aim at Facebook this week, filing a lawsuit alleging that the company has engaged in systematic anti-competitive behaviour. The lawsuit comes following an cooperative investigation between attorney generals in 46 states.
The lawsuit alleges that Facebook's acquisitions of Instagram in 2012 and WhatsApp in 2014 were anti-competitive, stifling competition at a time where social media competitors were beginning to find their footing. By doing so, Facebook allegedly managed to suppress competition in the market for years.
The lawsuit seeks to essentially break up Facebook, with the “divestiture of assets, divestiture or reconstruction of businesses and such other relief sufficient to restore the competition that would exist absent the conduct alleged in the complaint”.
Facebook has commented on the lawsuit already, stating: “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.”
This isn't the first time that the FTC has attempted to break up a huge company. As PCGamer points out, back in the day, the FTC sought to break up Microsoft into two companies – one for Windows and another for all other Microsoft-related entities. The FTC was initially successful, but the decision was later reversed on appeal.
KitGuru Says: It seems a little too late to break up Facebook. So many years have passed since Facebook's major acquisitions and ultimately, those did go through FTC approval. With that in mind, it might be hard for the FTC to now argue anti-competitive behaviour. Either way, this is just the beginning, there will be plenty more developments as this lawsuit continues.