In an ongoing case, US regulators are putting increased pressure on Facebook to admit its faults. Which, isn’t easy for a conglomerate of its sheer size, obviously. Earlier in 2020, these same regulators and 48 attorney general in the US initiated official proceedings for a bunch of lawsuits against Facebook. And things are getting fired up.
Letitia James, the New York attorney general spearheading one of the two lawsuits against Facebook, has accused the social network of abusing its “…dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users.” She’s… not wrong. After a lengthy investigation, regulators found evidence that Facebook CEO Mark Zuckerberg may have planned to buy out smaller businesses who could pose threats in future.
Facebook in pieces
James reportedly spoke publicly about Facebook and its ultimate power, calling for the company to sell off its two largest acquisitions: WhatsApp and Instagram. She cited how the social media company uses its ‘vast troves of data and money’ to fund a ‘buy or bury’ scheme to take out the competition.
She is of the opinion that Instagram and WhatsApp were acquired illegally, according to legislation in the US. Facebook, on the other hand, has a different view of this whole situation. “We disagree with the government’s allegations and we plan to fight this in court,” Zuckerberg said. “We compete with many other services in everything we do, and we compete fairly.”
It’s worth mentioning that Facebook is heavily pushing for an integrated chat throughout all its platforms, and have implemented many changes in Instagram and WhatsApp that are widely criticised. In 2018, the original Instagram founders left the company, citing creative differences with Facebook’s team. How it’s handled the growth of Instagram in particular, is questionable, to say the least.
Then the FTC steps in
Of course, James’ case is backed up by the Federal Trade Commission (FTC). The FTC filed a second lawsuit against Facebook, accusing it of implementing a “systematic strategy to eliminate threats to its monopoly”. It’s also accusing Zuckerberg of buying Instagram to neutralise a competitor.
If the FTC achieves its goal, it’ll force Facebook to sell WhatsApp and Instagram, which would have been acquired illegally in a bid to quash competitors. The FTC and US regulators have been investigating Facebook’s business for many years and have accumulated evidence that will help its cause. Thing is, it won’t be easy to force a major corporation to sell off resources it acquired many years ago.
“In one of the emails in the FTC filing, Zuckerberg is alleged to have said in 2008 that “it is better to buy than compete”. In another email, in 2012, Zuckerberg is said to have told lieutenants that WhatsApp was ‘legitimately a better product for mobile messaging than even our standalone Messenger app’ and ‘[u]nfortunately for us, I don’t think there’s any way to directly minimise the advantage which is their momentum and growth rate’,” The Guardian reports.
We’ll have to see how the two cases against Facebook pans out in the US, and how this will affect the social media landscape. At this point in time, Facebook, Instagram and Whatsapp don’t have any large or direct competitors, so it will be hard for the company’s attorneys to justify its fair competition in the US and beyond. Go ahead, try and think of legitimate direct competitors for the big three, we’ll wait.
Source: The Guardian