FTC, 40 States Seeks to Break Up Facebook for Being a Social Media Monopoly
The Federal Trade Commission along with more than 40 states have accused Facebook on Wednesday of being a social media monopoly through buying out its rivals to illegally eliminate competition.
The accusers further said that the deals that turned the social network a platform giant should be undone, as reported by The New York Times.
Federal and state regulators have been investigating the company for over 18 months.
Investigators said in separate lawsuits that Facebook's purchases eliminated competition that could one day challenge Facebook's dominance in the social media industry.
Facebook bough Instagram from $1 billion in 2012, and WhatsApp for $19 billion two years later. Instagram and WhatsApp have peaked in popularity after being bought by Facebook. This gives Facebook control over three of the world's most popular social media and messaging apps.
Related story: Big Techs Alleged of Bullying Small Techs, Congress Hearing With Top Tech CEOs Postponed
The applications have helped Facebook reached its success from a company that started in a college dorm 16 years ago to a social media giant worth over $800 billion.
The prosecutors called for Facebook to break off Instagram and WhatsApp, as well as adding new restrictions on future deals, in what amounted to some of the most severe penalties regulators can ask for.
Attorney General Letitia James of New York said that Facebook has used its dominance and monopoly power to break smaller rivals and remove competition, all at the expense of every day.
James said that this continued for nearly a decade. The lawsuit was filed in the U.S. District Court of the District of Columbia.
It also highlights the growing bipartisan and international tsunami against Big Tech. The Times reported that lawmakers have zeroed in on the grip that Facebook, Google, Amazon, and Apple maintain on commerce, electronics, social networking, and online advertising.
U.S. President Donald Trump has also argued countless times that tech giants have much power and influence.
Officials inside Democratic nominee Joe Biden's circle also made similar complaints. A lawsuit against Google was already brought by the Justice Department two months ago.
The case accuses the search giant of lawlessly protecting a monopoly. Prosecutors involved in the case, however, stopped short of demanding Google break off any parts of its business.
Republican and Democratic officials also filed a lawsuit against Google, which is expected by the end of the year.
Facebook Lawsuit
Meanwhile, lawsuits against Facebook are seen to set off a long legal battle, with the company denying any illegal anticompetitive behavior.
Related story: US Justice Department Sued Facebook for Alleged Discrimination Over US Workers
The Times also reported that it is expected that Facebook would use its large funding to defend itself.
During the Obama administration, the FTC signed off on Facebook's deals for Instagram and WhatsApp.
If the legal battle sided with the prosecutors, the cases could remake the company. Facebook's chief executive, Mark Zuckerberg, said that breakup of the company is an existential threat.
With the announcement of the lawsuit, the company's stock fell by two percent to $277.70 a share. Last month, Facebook said it was buying Kustomer for close to $1 billion.
Kustomer is a customer relationship management start-up. Facebook did not immediately respond to a request to comment on the issue.
Subscribe to Latin Post!
Sign up for our free newsletter for the Latest coverage!