Facebook Accused of Buying Up Rivals in Lawsuit That Seeks to Undo Deals With Instagram and WhatsApp
The Federal Trade Commission and 46 state attorneys general filed parallel lawsuits alleging Facebook of illegally eliminating competition in order to become an internet powerhouse – a move that allegedly weakened user privacy protections.
"For nearly a decade, Facebook used its dominance and monopoly power to crush smaller rivals, at the expense of everyday users," New York Attorney General Letitia James, who leads the state’s lawsuit, said during a press conference on Wednesday. "No company should have this much unchecked power over our personal information and our social interactions."
The parallel lawsuits are asking the courts to force Facebook to break off Instagram – which it acquired for $1 billion in 2012 – and WhatsApp – which it acquired for $19 billion in 2014 – and seek government approval for future mergers.
The suit alleges that its acquisition of its competitor platforms is how the company skyrocketed from dorm room start-up to a powerhouse in less than two decades.
"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,'” the Federal Trade Commission said in the suit.
James added that the purchases allegedly weakened privacy protection for its users.
Facebook, however, is firing back, saying that the federal government cleared the acquisitions years ago and that Facebook has plenty of competitors, including Twitter and TikTok.
"Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses,” a statement made by Facebook said. "The government now wants a do-over, sending a chilling warning to American business that no sale is ever final."
Facebook became as powerful as it is today by offering a superior product, Facebook said. “People and small businesses don't choose to use Facebook's free services and advertising because they have to, they use them because our apps and services deliver the most value,” the company saidt. "We are going to vigorously defend people's ability to continue making that choice."
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