It’s been reported that the Federal Trade Commission—an independent agency of the United States government—has filed an antitrust complaint that alleges Facebook used an illegal buy-or-bury scheme to maintain its market dominance. It is attempting to force Facebook to sell Instagram and WhatsApp.
Previously, the FTC filed a lawsuit against Facebook alleging that the platform has engaged in “monopolistic practises”. However, a federal court dismissed it, saying that the FTC “had failed to prove its central claim”.
This time, the FTC has filed an amended complaint which includes new data to support its claim. According to the claim, Facebook “monitors the industry for competitive threats” and would “acquire any companies that constitute threats to its personal social metworking monopoly”.
“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,” wrote FTC in its claim.
However, Facebook responded saying that the lawsuit was “meritless”. It released a statement on the Facebook Newsroom Twitter feed, and continued by saying that their acquisitions of Instagram and WhatsApp “were reviewed and cleared many years ago”, and that their platform policies were “lawful”.
“The FTC’s claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final,” said Facebook, “We fight to win people’s time and attention every day, and we will continue vigorously defending our company.”
Facebook bought over Instagram in 2011 for a fee of USD 1 billion (RM4.2 billion), and acquired WhatsApp for USD 19 billion (RM80 billion). In late 2020, Facebook stated that the FTC has cleared the platform’s acquisitions for “years” before they started filing their lawsuit.