Fb gears for antitrust lawsuits over Instagram, WhatsApp buyouts
The CEOs of Twitter, Facebook and Google are confronted by GOP senators with baseless accusations that the tech giants are showing an anti-conservative bias. Its focus is on Section 230, a law relating to unrestricted Internet language. (28th of October)
Facebook is preparing for one of the most significant litigation in its 16-year history: antitrust lawsuits from state and federal agencies aimed directly at two valuable acquisitions that have expanded its global footprint.
The two legal challenges, one from the Federal Trade Commission, the other from a coalition of up to 40 states, could come as early as Wednesday and Facebook is expected to have used its dominance and deep coffers to take down rivals, and in the process harmed consumers who had less choice and privacy as a result.
It is about two mega deals, the purchase of the social media app Instagram in 2012 worth 1 billion US dollars and the purchase of the messaging app WhatsApp in 2014 worth 19 billion US dollars, with which Facebook the Could rule the social media landscape.
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Facebook could not be reached immediately for comment.
Concerns that Facebook has become too powerful arise as Washington attempts to contain Silicon Valley. The Justice Department hit Google with an antitrust lawsuit earlier this year.
Facebook and Google have both argued that they offer free services that consumers flock to and operate in highly competitive markets.
A recent investigation into the power of the tech industry in Congress focused on the Instagram and WhatsApp acquisitions, accusing Facebook of picking up competitive threats “to maintain and expand its dominance.”
Facebook CEO Mark Zuckerberg appears on a monitor as he testifies remotely during a Senate Trade Committee hearing on Oct. 28. Senators and tech CEOs are preparing for a conflict over a law that protects online services from liability for third-party content. (Photo: MICHAEL REYNOLDS, POOL / AFP via Getty Images)
Mark Zuckerberg, CEO of Facebook, told staff he would oppose any government intervention.
“I don’t want to have a major lawsuit against our own government,” Zuckerberg told employees in response to a request to leave the company. This emerges from minutes of an internal meeting received from The Verge. “But look, at the end of the day, if someone is going to try to threaten something so existential, you get on the mat and fight.”
The Washington Post reported Tuesday evening that the states and the US government plan to file the lawsuit against Facebook on Wednesday.
The looming litigation is tied to high stakes for Facebook, which could be forced to go through the Instagram and WhatsApp deals previously reviewed and approved by the FTC.
Making appearances before Congress several times this year, Zuckerberg argued that Facebook’s success relies on building products that people want and that the Instagram and WhatsApp acquisitions have helped it grow.
In November, he told the Senate Judiciary Committee that Facebook did not see Instagram as a direct competitor in 2012.
“We had some competition with Instagram in the growing space of camera apps and photo-sharing apps, but I don’t think we or anyone else viewed Instagram as a competitor as a large, eclectic social platform,” he said. In fact, people at the time mocked our acquisition because they thought we had spent dramatically more money than we needed to buy, which at the time was mostly viewed as a camera and photo sharing app. “
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