One of the world’s largest internet companies might have to downsize after a federal consumer protection agency launched a new legal action.
The Federal Trade Commission (FTC) is suing Facebook Inc. for using financial means to suppress economic competition.
“Personal social networking is central to the lives of millions of Americans,” FTC Bureau of Competition Director Ian Conner said in a statement. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition.”
The agency has spent years investigating Facebook’s business conduct in conjunction with a coalition of the attorneys general in 46 states, the District of Columbia, and Guam. It discovered the social media giant allegedly exhibited a “systematic” strategy of acquiring the WhatsApp and Instagram cellphone apps to avoid competing with them for users, content, and advertising revenue.
“Facebook initially tried to compete with Instagram on the merits by improving its own offerings, but Facebook ultimately chose to buy Instagram rather than compete with it,” the FTC said. “Facebook’s acquisition of Instagram for $1 billion in April 2012 allegedly both neutralizes the direct threat posed by Instagram and makes it more difficult for another personal social networking competitor to gain scale.”
If Facebook loses the court case, it could be ordered to divide up the company, sell its stakes in Instagram and WhatsApp, stop imposing anticompetitive conditions on software developers, and be required seek both prior notice and approval for future merger and acquisition activity.
“Imposition of anticompetitive conditions on software developers [was intended] to eliminate threats to its monopoly,” the commission said. “This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition.”
“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive,” Conner added.
Facebook generated revenue above $70 billion and profits totaling more than $18.5 billion in the past year, according to the FTC.
Facebook previously banned paid election messages that warn voters about widespread electoral fraud due to increased postal voting at the November election.
The company cited “hate speech” rules to remove election ads on both Facebook and Instagram that contain any suggestion that voting fraud is widespread, U.S. election results will be invalid, or that any method of voting should be questioned.
It also banned Trump 2020 campaign ads that suggested illegal aliens might have been a significant source of CCP (Chinese Communist Party) Virus infections across the nation.