New York Attorney General Letitia James has announced a huge antitrust lawsuit against Facebook. The suit claims that the social media company has harmed competition; by buying up smaller companies like Instagram and WhatsApp.
The Attorney General alleges that the acquisitions were to crush any oppositions they posed to its business. Forty-seven other state and regional attorneys general are also joining the lawsuit against Facebook.
The lawsuit centers particularly on Facebook’s acquisition of Instagram in 2011. The attorney generals allege that in addition to its acquisition strategy, Facebook used the influence and reach of its platform to stifle user growth for competing services.
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“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition. Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance,” Letitia said in a press conference.
Also, The Federal Trade Commission brought a separate lawsuit against Facebook on similar allegations. The FTC suit calls on the court to unwind the acquisitions of Instagram and WhatsApp. Leading to a spin-off of both into independent companies.
“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive,” Ian Conner, director of the FTC’s Bureau of Competition, said in a statement.
The FTC case also echoes the Attorney Generals’ claims about anticompetitive use of Facebook’s platform. It refers specifically to Facebook’s practice of “cutting off API access to blunt perceived competitive threats”. The suit cites Facebook’s decision to block Vine’s friend-finding feature after its acquisition by Twitter as an instance of this behavior.
Facebook says both acquisitions were cleared by regulatory agencies and that overturning them would set a dangerous precedent.
“Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day,” the company said.
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