The Federal Trade Commission (FTC) has filed an extension to its complaint against Facebook, accusing the social networking giant of illegally buying up innovative competitors and eliminating them from the market to entrench its monopoly.
The FTC filed its lawsuit on Aug. 19 in the U.S. District Court for the District of Columbia, following the court’s June 28 ruling that dismissed the FTC’s initial complaint against Facebook for lack of evidence.
In its initial complaint, the FTC unsuccessfully explained how Facebook managed to acquire more than 60% of the social networking market using illegal strategies. After the judge dismissed the case in June, the FTC was granted an extension of time to refile the lawsuit.
The new amendment argues that the social networking giant dominates the market in the United States by including additional data and evidence intended to support the claim that the app is a clear example of monopoly.
The FTC said in a statement that while innovative competitors threatened Facebook’s dominance during the mobile boom of the 2010s quite frequently, the social networking giant embarked on an illegal “anticompetitive shopping spree” to take over rivals; including Instagram and WhatsApp, to “cement its monopoly.”
Among the demands of the lawsuit, the FTC asks the court to order Facebook to sell the Instagram platform, which was acquired in 2012 for $1 billion, and it should do the same with WhatsApp, which it bought in 2014 for $19 billion.
Another tactic used was to invite competitive app developers to participate within Facebook’s platform. Later, when it considered them an insider threat, it forced developers to accept restrictive conditions that effectively wiped them out.
“Developers that had relied on Facebook’s open-access policies were crushed by new limits on their ability to interoperate,” the FTC said in its statement.
The complaint also warns that Facebook’s illegal actions not only harmed competition but also “deprived consumers of other unruly, promising and disruptive applications that could have forced Facebook to improve its own products and services.”
Also cited in the report were serious user privacy abuses, specifically those that occurred in 2019, which led the FTC to bring charges against Facebook that ended with a settlement and a $5 billion fine.
“The FTC’s action today seeks to put an end to this illegal activity and restore competition for the benefit of Americans and honest businesses alike,” said Holly Vedova, acting director of the FTC’s Bureau of Competition.
For its part, a Facebook spokesperson spoke with Reuters and defended his company’s position saying that “there was no valid claim that Facebook was a monopolist, and that has not changed. We will continue to vigorously defend our company.”
Facebook has until Oct. 4 to respond to the FTC’s new allegations. However, the company announced that it is already reviewing the amendment and will have more information to pass on soon.