Facebook Faces Massive Lawsuits by US Feds & 46 States, Company Could Lose Instagram & WhatsApp Assets
In a staggering lawsuit brought against Facebook, the US Federal Trade Commission along with 46 states accused the tech company of being a monopoly with a "buy or bury" edict to disrupt competition. The only states and US territories not to participate in the lawsuit are Washington, D.C., Guam, Alabama, Georgia, South Carolina, and South Dakota.
The two antitrust lawsuits against the second-largest tech firm in the world were filed on Wednesday, following last year's historic $1 trillion Fed lawsuit against Google in October, which was a similar case where Google was accused of using strategies to stop rivals. The Fed lawsuit against Google case ended in a settlement.
The official complaint accuses Facebook of being a monopoly while stopping competition, stating, "For almost a decade, Facebook has had monopoly power in the personal social networking market in the United States. As set forth in detail below, Facebook illegally maintains that monopoly power by deploying a buy-or-bury strategy that thwarts competition and harms both users and advertisers."
The new Facebook lawsuits are powered by an ongoing surge in Congress by both Democrats and Republicans, who are focusing on the mighty power of major players in Big Tech such as Google and Facebook.
In court documents, the allegations against Facebook accuse the company of purchasing rival companies in violation of antitrust laws. The official complaints homed in on Facebook's previous acquisitions of Instagram, purchased at $1 billion in 2012, and WhatsApp, purchased for $19 billion in 2014.
These acquisitions, according to the Feds and state regulators, must be undone, an action that would be a very expensive and complex one and would also directly opposes the FTC ruling allowing the original Instagram and WhatsApp acquisition deals.
Facebook's general counsel Jennifer Newstead said the tech company does not agree with the lawsuits and will be vigorously fighting against the lawsuit's "revisionist history." Newstead said Facebook has already spent billions of dollars building both Instagram and WhatsApp, and that going back in time is not a fair option for Facebook.
"The government now wants a do-over, sending a chilling warning to American business that no sale is ever final," said Newstead.
Newstead's comments reflect those of Facebook's founder, Mark Zuckerberg, who told his employees last year "that Facebook would "go to the mat" to fight any legal challenges to break up the company.
The twin Facebook antitrust lawsuits are the largest in US history since May 1998, when the US Department of Justice and 19 states sued Microsoft for being a monopoly and trying to stop any rivals in their tracks.
With the lawsuit calling for a breakup between Facebook and its two most prized Apps, this is expected to be a long, drawn-out legal case.
