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This article was published on December 9, 2020

FTC announces lawsuit against Facebook for ‘illegal monopolization’

FTC announces lawsuit against Facebook for ‘illegal monopolization’

The US Federal Trade Commission (FTC) today announced its lawsuit against Facebook alleging the company has formed an illegal monopoly based on anticompetitive practices.

According to a notice from the FTC, the suit involves the company’s Instagram, Messenger, and WhatsApp services as well as Facebook‘s alleged imposition of anti-competitive practices on software developers.

The notice goes on to state that the US government seeks an injunction that would force the company to divest from those and potentially other properties and prevent Facebook from acquiring new companies without federal permission.

Per the FTC statement:

Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategy—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers—to eliminate threats to its monopoly. This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition.

The FTC is seeking a permanent injunction in federal courtthat 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.

Quick take: It’ll take some further analysis to see how much teeth this thing has considering the US is in a bit of a transitional state right now. At this point, predicting how the lame duck or incoming President’s administrations might play this one is a long shot. But it’s worth mentioning that this is in the court’s hands.

We’ve reached out to Facebook for more information and will update this article once we have it.

Update 2:00 PM PST: Facebook’s response can be found here

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