At the end of October, we wrote about The Power of Google Leads to an Antitrust Case. Now, another shoe has fallen, as the FTC Sues Facebook for Illegal Monopolization. This too promises an intense, multi-year legal battle.
Next Legal Battle: FTC Sues Facebook for Illegal Monopolization
On December 9, 2020, the FTC ( Federal Trade Commission) filed a legal action against Facebook. Here, we review the filing. Then, the data behind it.
Thereby, alleging the company illegally maintains its personal social networking monopoly through years-long anticompetitive conduct. A lengthy investigation was conducted in cooperation with attorneys general of 46 states, the District of Columbia, and Guam. The complaint notes that Facebook engaged in a systematic strategy to eliminate threats to its monopoly. This included its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of mobile messaging app WhatsApp, and imposition of anticompetitive conditions on software developers That conduct harms competition. Leaves consumers with few choices for personal social networking. And deprives advertisers of the benefits of competition.
For access to the complete filing, click the image.
Data Behind the Filing
After the filing, Statista examined the data behind it. As Felix Richter reports:
FTC Bureau of Competition Director Ian Conner says the Commission seeks to “unwind Facebook’s prior acquisitions of Instagram and WhatsApp.” In fact, that represents a bold move.. Because the FTC greenlit the Instagram deal in 2012 after a review. In addition, the European Commission found no threat to competition stemming from WhatsApp in 2014.
Facebook’s General Counsel Jennifer Newstead calls the lawsuit “revisionist history.” She notes that Facebook invested billions of dollars to make Instagram and WhatsApp more popular. And she warns that “this lawsuit risks sowing doubt and uncertainty about the government’s merger review process. In addition to whether acquiring businesses can actually rely on the outcomes of the legal process.”
As the following Statista chart shows, Facebook has a point. Instagram had around 30 million users at the time of its acquisition. While WhatsApp was considerably larger at 450 million users.