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 like Instagram and WhatsApp. Forty-seven other state and district attorneys general agree with the lawsuit.
The lawsuit focuses on his acquisitions Facebook, ιδίως την αγορά Instagram ύψους 1 δισεκατομμυρίου δολαρίων το 2011. Εκτός από τη στρατηγική acquisitions, the attorneys general allege that Facebook used the power and reach of its platform to limit user growth on 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 acquire potential rivals before they threatened its dominance companyς ”.
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 regulatory agencies and that overturning them would set a dangerous precedent. "Years after the FTC approved our acquisitions, the government now wants a change without considering the impact the precedent would have on the broader business community or the people who choose the products us every day", says the company.
Another dimension of the antitrust case is whether Facebook acquiring the companies made the product worse from a consumer perspective – 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 its decision to later use WhatsApp user data may have harmed consumers and destroyed rival competition by exploiting privacy of users.