Facebook Instagram & WhatsApp will see companies split
On Wednesday, New York Attorney General Letitia James announced a massive antitrust lawsuit against Facebook, claiming that the social network has hurt competition by buying smaller companies such as Instagram and WhatsApp. Forty-seven other state and regional attorneys general agree with the lawsuit.
The lawsuit focuses on Facebook's acquisitions, particularly the $ 1 billion Instagram market in 2011. In addition to the acquisition strategy, attorneys allege that Facebook used the power and scope of its platform to restrict user growth to competing services.
"For almost a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and eliminate competition," James told a news conference.
"Facebook used huge sums of money to gain potential rivals before threatening the company's dominance."
The Federal Trade Commission filed a separate lawsuit against Facebook for similar reasons, which was announced at the same time as the lawsuit. The FTC case explicitly asks the court to break the dominance of the social network, dividing the Instagram and WhatsApp services into two independent companies.
"Our goal is to reverse Facebook's anti-competitive behavior and restore competition so that innovation and free competition thrive." said Ian Conner, Director of the FTC Competition Office.
Facebook, on the other hand, claims that both acquisitions were made in consultation with regulators and that their overthrow would be a dangerous precedent. "Years after the FTC approved our takeovers, the government now wants a change without taking into account the impact it would have on the wider business community or the people who choose our products on a daily basis," the company said.
Another aspect of the antitrust lawsuit is whether the companies' acquisition of Facebook made the product worse for consumers - especially in terms of privacy.
Facebook has long claimed that its resources and scale are responsible for turning applications such as Instagram and WhatsApp into giant platforms with billions of users. However, researchers are considering how to market it, for example WhatsApp from Facebook and his decision to use WhatsApp user data later may have harmed consumers and ruined competitors 'competition by exploiting users' privacy.