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The heart of tech

This article was published on August 20, 2021

FTC lawsuit seeks to force Facebook to sell Instagram and WhatsApp

The complaint accuses Facebook of operating a monopoly

FTC lawsuit seeks to force Facebook to sell Instagram and WhatsApp
Thomas Macaulay
Story by

Thomas Macaulay

Writer at Neural by TNW — Thomas covers AI in all its iterations. Likes Werner Herzog films and Arsenal FC. Writer at Neural by TNW — Thomas covers AI in all its iterations. Likes Werner Herzog films and Arsenal FC.

Facebook’s “special announcement” of a new VR meeting app was curiously timed. It arrived on the same day that the Federal Trade Commission made a fresh attempt to force the company to sell Instagram and WhatsApp.

The FTC filed an antitrust complaint on Thursday that alleges Facebook used an illegal buy-or-bury scheme to maintain its market dominance.

The US competition regulator argues that Facebook repeatedly failed to develop meaningful innovations on its mobile app. Instead, it acquired competitors, including Instagram and WhatsApp, with features that had succeeded where Facebook’s own attempts had failed.

The FTC further alleges that Facebook lured app developers to the platform and buried them when they became competitive threats.

The agency called on the federal court to unwind the acquisitions of Facebook and Instagram.

A second attempt

The complaint is the FTC’s second antitrust salvo against Facebook. In June, a federal court dismissed a lawsuit from the regulator alleging that Facebook has engaged in monopolistic practices. The court argued that the FTC had failed to prove its central claim.

The amended complaint includes new data that the FTC says supports its contention. It argues that Facebook’s antitrust conduct is ongoing:

Facebook’s continued ownership and operation of Instagram and WhatsApp both neutralizes their direct competitive threats, and creates and maintains a ‘moat’ that protects Facebook from entry into personal social networking by another firm via mobile photo-sharing and mobile messaging.

Facebook continues to monitor the industry for competitive threats and likely would seek to acquire any companies that constitute, or could be repositioned to constitute, threats to its personal social networking monopoly.

Facebook described the lawsuit as “meritless.”

“Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful,” the company said on Twitter.

Facebook had also sought to recuse FTC Chair Lina Khan from the case due to her previous criticism of the company, but the petition was dismissed.

The new filing capped a long day for Facebook. The company was criticized for letting a bomb threat suspect livestream his grievances for hours, and its first step to the metaverse was mercilessly mocked.

The FTC case may appear a more existential threat to the company, but breaking up big tech is proving hard to do.

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