Friday 20th August 2021
Next attempt for breaking up
USA sues again against Facebook “monopoly”
US antitrust watchdogs do not want to give up in the dispute with Facebook despite an initial setback in court. Therefore, they are amending the lawsuit calling for the online network to be split up. With more arguments, the anger about WhatsApp and Instagram should be settled.
The US government is starting a new attempt to break up the online giant Facebook in court. The trade authority FTC submitted a revised antitrust law suit. The responsible judge James Boasberg had rejected the first version in June on the grounds that the FTC had not provided sufficient evidence for an alleged monopoly of Facebook in the market for social networks.
The agency had accused tech billionaire Mark Zuckerberg’s group of unfair competition in the lawsuit originally filed in December and discussed the separation of the Instagram photo platform and the Whatsapp chat service. Facebook only bought the companies in order to eliminate them as competitors, was the reason. Judge Boasberg had initially given the FTC 30 days to amend the lawsuit. Thereafter, the deadline was extended to August 19.
More arguments this time
The FTC has now emphasized that Facebook has illegally bought up innovative competitors whose mobile applications have been successful where their own offers have failed. Facebook “lacked the business intelligence and technical talent to survive the change to the mobile,” said FTC representative Holly Vedova. Facebook’s advertising platform was originally geared entirely towards using the network on the PC. The company was initially caught off guard by the widespread change in users to smartphones. However, Facebook got the situation under control relatively quickly with new types of ads such as advertising in users’ news feeds.
As requested by the judge, the FTC now provided more arguments that are supposed to prove Facebook’s monopoly position. The authority relies primarily on the development of user numbers and analyzes of the time people spend on the platform. At the same time, the FTC tried in the lawsuit to clearly define the market for social networks.
Accordingly, there are platforms on which users maintain contacts with friends and family and at the same time share contributions and experiences in a common space. Based on this definition, the FTC sees Twitter, Youtube and the emerging video platform Tiktok, for example, in other categories – because they are more geared towards the use of content than personal connections.
Facebook thinks it’s “regrettable”
Facebook described the new attempt by the cartel authority in a statement as “regrettable”. The proceedings are unfounded, as the group does not have a dominant position – nothing has changed in that regard. “Our takeovers of Instagram and Whatsapp were reviewed and approved many years ago,” said the company. The FTC is trying to rewrite the competition laws.
Facebook will continue to vigorously defend itself. The online network had also requested that FTC boss Lina Khan stay out of competition investigations against the company – because she was biased. The motion was denied – and Khan’s vote was decisive in the agency’s decision to resubmit the lawsuit rather than abandon it.
Facebook bought Instagram in 2012 for around one billion dollars and WhatsApp in 2014 for around 22 billion dollars in the end. Instagram now has around one billion users, Whatsapp around two billion. The US competition watchdogs approved the takeovers of Instagram and Whatsapp at the time. In addition to the FTC, an alliance of more than 40 states had filed a lawsuit against the deals, but Judge Boasberg dismissed it completely in June.
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