FTC Sues Facebook for Illegal Monopolization



The Federal Trade Commission (FTC) announced that it has sued Facebook. The FTC alleges that Facebook is illegally maintaining its personal social network monopoly through a years-long course of anticompetitive conduct. The lawsuit comes after a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam.

The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions.

A separate lawsuit is led by New York Attorney General Letitia James, who stated that: “The lawsuit alleges that, over the last decade, the social networking giant illegally acquired competitors in a predatory manner and cut services to smaller threats – depriving users from the benefits of competition and reducing privacy protections and services along the way – all in an effort to boost its bottom line through increased advertising revenue.”

The Verge reported that this lawsuit centers on Facebook’s acquisitions, particularly its $1 billion purchase of Instagram in 2011. In addition to its acquisition strategy, the attorneys general allege that Facebook used the power and reach of its platform to stifle user growth for competing services. The Verge also reported that the FTC case cites Facebook’s decision to block Vine’s friend-finding feature after the Twitter acquisition as a particularly flagrant instance of this behavior.

To me, it seems like Facebook could potentially face some legal consequences as a result of one – or both – of these lawsuits. It will be interesting to see what would happen if Facebook is required to seperate itself from Instagram and WhatsApp. If Facebook is required to improve user privacy, I think many people would want to know the specific details about how it will do that.