The US Federal Trade Commission (FTC) continued an attack on Facebook, filing a revised, more detailed complaint against the social media giant alleging it abused its market power to suppress competition and reiterating calls for the company to be broken up.
Its fresh complaint picks up on a similar filing [1] from the FTC and a coalition of 46 US states in December 2020, which called on Facebook to divest Instagram and WhatsApp assets on the grounds it had abused its dominant position to eliminate or stifle competitors.
Facebook acquired Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
However, the original complaints were dismissed [2] by a federal judge in June, after being deemed legally insufficient and for not providing enough evidence of Facebook being a monopoly.
The FTC has not given up. In its latest attack, it claimed Facebook had engaged in an “illegal buy-or-bury scheme” to maintain its dominance, after repeated failed attempts to develop innovative mobile features.
It argued Facebook had unlawfully acquired innovative competitors with popular mobile features, when its own offerings fell flat or apart and also lured app developers to the platform. It then “surveilled them for signs of success, and then buried them when they became competitive threats”.
Acumen
The FTC’s argument provides more detail than last time, with its complaint spanning 80 pages in total compared with the 53 of the original. Among its list of complaints is a claim Facebook’s “anti-competitive acquisition strategy” also served to deprive competitors’ access to its platforms by creating a “high barrier to entry”.
“Facebook lacked the business acumen and technical talent to survive the transition to mobile, Facebook illegally bought or buried them when their popularity became an existential threat”, Holly Vedova, acting director of the FTC Bureau of Competition, stated adding the regulator’s latest action “seeks to put an end to this illegal activity and restore competition”.
Facebook has until 4 October to legally respond to the latest assault, but stated on Twitter it was unfortunate the FTC had “chosen to continue with this meritless lawsuit”, despite the court’s dismissal of its previous move.
[1] https://www.mobileworldlive.com/featured-content/top-three/facebook-pushed-to-spin-off-whatsapp-instagram
[2] https://www.mobileworldlive.com/apps/news-apps/facebook-hits-back-at-breakup-calls
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