Facebook has to defend itself in a US federal court against the allegation of obstruction of competition. The lawsuit was filed in December by the FTC and almost all US states. On Wednesday, Facebook tabled its customary motion to dismiss the lawsuit. The company is trying to nip the legal proceedings in the bud. In the event of a defeat in court, Instagram and WhatsApps may even be spun off.
The FTC has outlined the market in which Facebook is active too vaguely, argues the data company. In addition, the authority is only allowed to counter current legal violations. The FTC is not allowed to correct its own previous decisions on legal proceedings. At the time, the competition authority approved the takeovers of Instagram and WhatsApps. In addition, Facebook thinks that the states should not sue; because they did not claim to have been harmed by Facebook’s behavior.
The US trade regulator’s lawsuit presents Facebook as a monopoly in the US market for personal social networks. Facebook does not maintain this monopoly through better competitive performance, but through illegal takeovers and the establishment of its own rules. The application is based primarily on internal e-mails and messages from Mark Zuckerberg, other Facebook managers and simple employees.
Fear of competition
Several quotes suggest that Facebook perceived Instagram and WhatsApp as existential threats and therefore bought them. “It’s better to buy than to compete,” quoted the FTC in an email from Zuckerberg in 2008. In February 2012, the billionaire found Instagram “really scary,” which is why Facebook should possibly pay “a lot of money” for Instagram.
As early as April of that year, Facebook surprised with the coup of the Instagram takeover for one billion dollars. $ 19 billion went over the counter in February 2014 when Facebook bought WhatsApp. In addition, Facebook is said to have tried in vain to acquire Twitter and Snapchat.
The FTC’s second group of allegations relates to the Facebook Platform for third party apps and certain important programming interfaces (API). Their use was tied to more and more restrictions from 2011 – apparently with the aim of digging the water away from competitors such as Google+ and independent apps. It was only when a British MP started to publish documents about Facebook’s actions in 2018 that the company relaxed the rules again.
The lawsuit is called Federal Trade Commission v. Facebook and is pending in the US Federal District Court for the District of Columbia under Ref. 1: 20-cv-03590.