The US Federal Trade Commission (FTC) and attorneys general from nearly every US state are suing Facebook for anti-competitive behaviour and demanding that its social media monopoly be broken up.
In complaints filed on Thursday morning, the FTC and US states claim Facebook has violated antitrust law by deliberately squeezing out social media competitors it could not acquire.
For compensation, the joint action wants to restrain Facebook’s future acquisitions and see it divested of both Whatsapp and Instagram.
Ian Conner, Director of the FTC’s Bureau of Competition, said he wanted to see social media return to being a more competitive space.
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” Connor said in a statement.
“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
At the heart of the FTC’s complaint are the acquisitions of Whatsapp and Instagram which the commission understands were orchestrated when Facebook recognised the platforms potential for offering genuine competition to Facebook in social media and messaging.
The complaint refers to an ethos espoused by Facebook’s founder Mark Zuckerberg that “it is better to buy than compete”.
Facebook has made dozens of acquisitions since its inception in 2004, picking up smaller messaging and social media-related companies along with large tangential purchases, like virtual reality company Occulus in 2014.
Aside from taking issue with Facebook’s anti-competitive acquisition strategy, the FTC also alleges that Facebook restricted access to its APIs to “blunt perceived competitive threats” from rival social networks, effectively limiting access to Facebook’s massive userbase.
One example mentioned in the complaint followed Twitter’s acquisition of short-form video platform – and TikTok precursor – Vine.
When Vine was released under its competitor’s banner, a Facebook director suggested the company shut off its API access to restrict its growth and incursion on the tech giant’s dominance of social media.
“Collectively, Facebook’s announcement and enforcement of its anticompetitive conditions have served to hinder, suppress, and deter the emergence of promising competitive threats to its US personal social networking monopoly,” the FTC complaint says.
Facebook naturally rebuffed the joint complaints, calling it “revisionist history” and pointing out that both the FTC and its European counterpart cleared the Whatsapp and Instagram acquisitions.
“Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses,” Facebook VP and General Counsel Jennifer Newstead said in a statement.
“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.
“We look forward to our day in court, when we’re confident the evidence will show that Facebook, Instagram and WhatsApp belong together, competing on the merits with great products.”
The court action is the second undertaken by the US government and state attorneys general in recent months.
In October, US Attorney General William Barr filed complaints against Google for anticompetitive behaviour relating to its search monopoly.
That came only a week after the Democrat-controlled House Judiciary Subcommittee on Antitrust handed down its findings after an 18-month long investigation into the US tech giants which recommended updating antitrust legislation to further limit the companies’ power.
