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Facebook Faces Historic Breakup Lawsuit
5 Nov
Summary
- Facebook is sued by FTC and nearly every US state for antitrust violations.
- Lawsuit seeks to force Facebook to sell Instagram and WhatsApp assets.
- Legal battle could span years, comparable to Microsoft antitrust case.
The U.S. Federal Trade Commission, alongside nearly every state, has filed a major antitrust lawsuit against Facebook. This legal action alleges that Facebook has exploited its dominant market position to eliminate smaller competitors and suppress competition for nearly a decade. The core demand of the lawsuit is to compel Facebook to divest its highly valued acquisitions, Instagram and WhatsApp.
Legal experts anticipate a protracted legal battle, potentially spanning several years, drawing parallels to the significant antitrust case against Microsoft in 1998. Facebook's CEO, Mark Zuckerberg, has vowed to fight the allegations vigorously, viewing the lawsuits as a lengthy process. While the FTC initially approved Facebook's 2012 purchase of Instagram for $1 billion and its 2014 acquisition of WhatsApp for $19 billion, it is now attempting to undo these consummated mergers, a move experts note is exceptionally difficult.
The Justice Department has previously undone mergers, such as Bazaarvoice and Power Reviews in 2014, and famously orchestrated the breakup of AT&T in 1982. Facebook's general counsel has criticized the lawsuit as revisionist history, asserting that Instagram and WhatsApp have flourished due to Facebook's substantial investments, and that the apps' belonging together is evident.
