The Federal Trade Commission has sued for the breakup of Facebook asking the Federal Court to force the selloff of its Instagram and WhatsApp as independent businesses.
“Since toppling early rival Myspace and achieving monopoly power, Facebook has turned to play defense through anticompetitive means,” the FTC lawsuit stated.
“After identifying two significant competitive threats to its dominant position — Instagram and WhatsApp — Facebook moved to squelch those threats by buying the companies, reflecting CEO Mark Zuckerberg’s view, expressed in a 2008 email, that it is better to buy than compete,” it added.
Facebook had purchased Instagram for $1 billion in 2012 approved by the FTC when Instagram wasn’t widely used. Facebook had bought WhatsApp in 2014 for around $22 billion.
The lawsuit does not explicitly demand the selloff of Facebook businesses, instead, they are asking the Federal Court to halt the firm’s anticompetitive conduct and take any other action that the court sees fit.
The lawsuit also aims at Facebook’s treatment of competitor apps which squeezed oxygen from the tech industry with its practices. They have sent a clear message to the industry not to tread on Facebook’s turf.
Apart from this, Attorneys General from 48 states and territories said they were filing their own lawsuit against Facebook.
AT&T was the last big tech company that was forced to break up in 1984.
The Facebook lawsuits are comparable to the lawsuit against Microsoft in 1998. However, the case was settled, but it prevented the firm from thwarting competitors.
Mark Zuckerberg said the company was reviewing the lawsuits.
“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,” Facebook said in a statement, adding that it would have more to say soon.
Zuckerberg had vowed a vigorous defense last year. He had told employees in an internal meeting that if the government sued to break up Facebook, he would bet on a legal battle.
Antitrust action was building on nearly all the big tech companies.
In October, the Justice Department and 11 states had sued Google for illegally monopolizing the market for search-related advertising.
Facebook, which had agreed to pay $5 billion to the FTC to end an investigation into the company’s privacy practices, is already facing a proposed class action brought by app developers claiming illegal monopolistic behavior.