[ad_1]
The lawsuit is based on Facebook’s accusation of violating monopoly law and harming competition by buying up small businesses such as Instagram and WhatsApp, to crush the threat they pose to the company’s business. ‘business.
The lawsuit focuses on the history of acquisitions initiated by Facebook, including those it made in 2011, when it bought the Instagram app in a deal valued at $ 1 billion, and the WhatsApp application in 2014 worth nineteen billion dollars.
For nearly a decade, said New York Attorney General Letitia James, Facebook has used its dominance and monopoly power to crush smaller competitors and eliminate competition, to the detriment of ordinary users.
James and the rest of the forty-seven plaintiffs explained that Facebook’s acquisitions were illegal.
The plaintiffs are asking the federal court to intervene on the possibility of separating these claims, and the lawsuit also calls on the court to immediately prevent Facebook from making acquisitions worth more than $ 10 million with the end of the case.
Double whammy
The Facebook legal strike came in two ways with the entry of the Federal Trade Commission, which filed a parallel lawsuit, leading to a drop in the company’s share of nearly four percent.
In its lawsuit, the Federal Trade Commission said that since the ousting of Facebook’s main rival, MySpy, and gaining monopoly power, Facebook has shifted to a defensive strategy through anti-competitive means.
She noted that after identifying two significant competitive threats to its dominant position on social media, Instagram and WhatsApp, Facebook decided to remove these threats by buying companies, reflecting CEO Mark Zuckerberg’s perspective.
In emails revealed by the House antitrust subcommittee during a hearing last summer, Zuckerberg described his intention to buy Instagram, in emails to David Ebersmann, Facebook’s chief financial officer at the time, as a way to neutralize a competitor while improving Facebook by integrating features. Invented by the app, before any other novice had time to catch up and pose a similar threat.
This message was highlighted by the Federal Trade Commission in its lawsuit against Facebook and its founder, which adopts the “buy is better than competition” philosophy, as stated in the lawsuit.
Facebook first revealed that it was the subject of a Federal Trade Commission antitrust investigation in July last year, when a coalition led by Letitia James of New York City announced a few trade investigation. time after.
Facebook has faced a fast-track review of user data processing and competitive practices since 2017, when press inquiries revealed that its service was used by political data firm Cambridge Analytica to obtain information about users without their consent before the 2016 US presidential election.
The Federal Trade Commission agreed with Facebook to pay $ 5 billion last year, after investigating its data practices.
Tech hawks have criticized the deal in Congress as a minor warning to the company. The amount paid represents only about 9% of the 2018 revenue of the Silicon Valley giant.
Lawmakers at the time also criticized the Federal Trade Commission for failing to adequately review Facebook’s acquisitions after the House Judiciary Committee released internal Facebook documents regarding its moves to its competitors.
The lawsuit, the culmination of a more than a year-long investigation, is the latest blow to big tech companies.
Just two months ago, the US Department of Justice and 11 states filed a lawsuit against Google, alleging the company had violated competition law.
The Justice Department, in its October filing, made it clear that the search engine giant violated antitrust law by illegally maintaining a monopoly on public Internet searches by linking distribution channels to competitors.
“Law enforcement and regulators have long been saying they’d rather not interfere with big tech companies, and it has become clear that those days are over,” said Charlotte Solomon, former lawyer at the Federal Trade Commission.
The investigations could force Facebook to separate parts of its business or impose far-reaching restrictions on its operation.
But experts say Facebook could also be forced to allow people to simultaneously post on non-Facebook platforms and also allow them to view posts from competing social networks.
[ad_2]
Source link
