In addition to the FTC, the federal agency filed a separate lawsuit with a panel of 48 state competition authorities.
Facebook bought Instagram in 2012 and Whatsapp in 2014. Photo Getty image
In the U.S., federal and state competition authorities have filed lawsuits against the social media giant Facebook. Authorities are working to crack down on Facebook ownership of image service Instagram and communications service Whatsapp.
When lost, Facebook may have to sell its valuable services. Facebook acquired Instagram in 2012 and Whatsapp in 2014.
Facebook is accused of violating competition laws and abusing its dominant position. A spokesman for the U.S. Trade Commission (FTC) commented that Facebook’s actions had deprived consumers of the benefits of free competition. Facebook denies the allegations.
“Our goal is to incense anti-competitive use of Facebook and restore competitiveness so that innovation can flourish,” said FTC’s Ian Conner.
In addition to the FTC, the federal agency filed a separate lawsuit with a group of 48 state and territory competition authorities. So almost all US states are involved.
“for almost 10 years, face book has used its own dominance and monopoly power to conquer its smaller competitors and also stifle competition at the cost of average users,” stated New York Attorney General Letitia James, who directs the band.
Facebook: “Competition laws are not meant to punish winners”
Facebook says it will provide a detailed response to both charges, as long as it has had time to look more closely at the charges’ content.
In its statement, Facebook adds that it is surprising that the U.S. administration wants to start investigating the legality of acquisitions from scratch, even though the FTC issued clean papers about the deals years ago.
– The administration does not care about the impact of the investigation on business and the people who choose our products at the moment, the statement states.
– Competition law exists to protect consumers and support innovation. It is not intended to penalize successful companies, Facebook lawyer Jennifer Newstead commented.
According to Newstead, “Instagram and Whatsapp are amazing products like today,” thanks to the fact that Facebook has invested billions of dollars in them as well as years of work.
“The government wants new decisions, which will send a chilling warning to U.S. companies that no trade agreement is written in stone,” Newstead adds.
According to some analysts, it may be difficult for authorities to prove in court that Facebook’s actions would have been detrimental to consumers because Facebook is free to its users.
Christopher Sagers, a professor at Cleveland State University, remarked to AFP that face book was unscrupulous from the market.
Still, under current U.S. competition law, it is difficult for authorities to win a court case.