US FTC Files Refreshed Antitrust Complaint Alleging Facebook Crushed Or Bough Rivals

After having failed once before, the United States Federal Trade Commission (FTC) filed a refreshed antitrust case against the social media giant Facebook Inc earlier this week as the regulator’s latest case contains more information and details to support its accusation that the largest social media company of the world had either rumpled or acquired its rivals. The FTC again approached the court to order Facebook to break up the company by selling Instagram and WhatsApp.

The new complaint by the FTC is much longer, with a total of 80 pages, than the original one and is comprises of additional data aimed at supporting the FTC’s allegations of the monopolistic business processes of Facebook. The additional information presented in FTC argues that the personal social networking market of the US is dominated by Facebook with a market share of the monthly active users of more than 65 per cent since 2012.

The amended lawsuit was voted at the FTC 3-2 along party lines. The regulator also rejected a request by Facebook that agency head Lina Khan be recused.

Khan participated in filing the new complaint.

The FTC again appealed to the court to order the selling off of Instagram – owned by Facebook since its acquisition in 2012 doe $1 billion, and Whatsapp, also owned by the social media company since 2014 for $19 billion.

In the refreshed case filing, the FTC described the social media firm of an “illegal buy or bury scheme to crush competition”, according to the headline of the press release issued by the regulator on its complaint.

It would continue to fight the lawsuit, Facebook said.

“It is unfortunate that despite the court’s dismissal of the complaint and conclusion that it lacked the basis for a claim, the FTC has chosen to continue this meritless lawsuit,” a company spokesman said. “Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful.”

With many in Washington aims to tackle Big Tech’s extensive market power, this latest high-profile case against Facebook brought by the FTC is being watched closely and is amongst the most significant challenges that it has brought against a tech company in decades.

“Despite causing significant customer dissatisfaction, Facebook has enjoyed enormous profits for an extended period of time suggesting both that it has monopoly power and that its personal social networking rivals are not able to overcome entry barriers and challenge its dominance,” the amended complaint said.

In its complaint, the FTC differentiated Facebook from short video app TikTok and sites like Twitter, Reddit and Pinterest, sites that do not seek to connect friends and family, in an effort to better explain the dominance of Facebook in the personal social networking market.

The original complaint against Facebook by FTC in December last year had been dismissed by a court as the court said that the complaint has failed to provide evidence in support of FTC’s claim of the social media company being a monopoly power in the social-networking market.

“Having suspended its anticompetitive platform policies in response to anticipated public scrutiny, Facebook is likely to reinstitute such policies if such scrutiny passes,” the complaint said.

(Adapted from MarketWatch.com)



Categories: Entrepreneurship, Regulations & Legal, Strategy, Sustainability, Uncategorized

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