Facebook has acquired some major mobile companies in recent years, but it's now been hit with a lawsuit related to those purchases.
The Federal Trade Commission and a group of 48 attorneys general have filed lawsuits against Facebook. Both complaints accuse Facebook of illegal monopolization and maintaining that monopoly through anticompetitive conduct.
"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," said Letitia James, New York Attorney General. "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 behavior. Instead of competing on the merits, Facebook used its power to suppress competition so it could take advantage of users and make billions by converting personal data into a cash cow."
The complaints focus on Facebook's $1 billion acquisition of Instagram in 2012 and its $19 billion purchase of WhatsApp in 2014 as major issues. The FTC and AGs argue that rather than try to compete against these popular services, Facebook chose to acquire them in moves that neutralized their threat against Facebook and made it harder for future social networking and messaging companies to compete against Facebook.
Another complaint against Facebook is that it has imposed anticompetitive conditions on third-party developers who wish to connect to the Facebook platform. The FTC argues that Facebook has made important APIs available to third-party apps available only on the condition that those apps do not promote other social networks or create features that compete with Facebook.
The FTC is seeking a permanent injunction that could require Facebook to divest Instagram and WhatsApp, prohibit Facebook from imposing anticompetitive conditions on third-party app developers, and require Facebook to seek prior notice and approval for future merger and acquisitions.
Facebook has not yet issued a response to these lawsuits.
UPDATE: Facebook has issued an official response to these lawsuits, saying that its acquisitions of Instagram and WhatsApp were "reviewed by relevant antitrust regulators at the time" and that the deals were allowed to move forward "because they did not threaten competition." Facebook went on to call these lawsuits "revisionist history".
