Antitrust Case against Facebook
The United States government has filed two cases against the Facebook. The United States federal government have put under the scanner the acquisition by Facebook of Instagram and WhatsApp.
What is the issue?
The lawsuit of US Federal Trade Commission (FTC) have accused Facebook of eliminating the competition with the acquisitions. The FTC accused that Facebook has eliminated the competition, even though the FTC itself had approved the deals.
About the FTC’s lawsuit
The FTC alleges that Facebook illegally maintains its personal social networking monopoly by a years-long course of anticompetitive conduct. This FTC lawsuit is followed by a “lengthy investigation”. The investigation was done by the coalition of attorneys general of 46 states, District of Columbia and the Guam. Following the investigation, the FTC has filed a case under Section 2 of the Sherman Act. This section of the act, prohibits any companies from using anti-competitive means to acquire or maintain the monopoly. The FTC also accuses Facebook to impose the “anti-competitive conditions” on the software developers. The case further highlights that, the Facebook has restricted the “third-party software developers’ access to valuable interconnections to its platform. Facebook has done so by exercising strict control over its application programming interfaces.
Implication of the lawsuit
The lawsuit wants to sell off the assets of Instagram and WhatsApp. If the FTC win the lawsuit, Facebook will require to sell Instagram and WhatsApp. Further, the lawsuit will prohibit Facebook from imposing any anti-competitive conditions to the software developers. Thus, Facebook will require prior notice and approval for any of its future mergers and acquisitions.