Facebook Faces Anti-Trust Lawsuits (REPORT)

(ConservativePeak.com)- Two major antitrust lawsuits were filed against Facebook on Wednesday, and those involved say the company must be broken up.

The suits were filed by the federal government as well as some states. They allege the social media company abused the power it has over the digital marketplace, engaging in what they term anticompetitive behavior in the process.

The Federal Trade Commission is seeking a permanent injunction from a federal court. If approved, it would require Facebook to divest some of its assets, including two other social media companies it acquired — WhatsApp and Instagram.

The case filed by the states are asking for Facebook to be broken up if it’s necessary.

The director of the Bureau of Competition at the FTC, Ian Conner, said in a statement:

“Personal social networking is central to the lives of millions of Americans. Facebook’s actions to entrench and maintain its monopoly deny consumers 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.”

Both of the suits focus on Facebook acquiring and controlling those two other social media apps. In 2012, Facebook said it purchased Instagram for $1 billion. Then, in 2014, it acquired WhatsApp for $19 billion.

About 14 months ago, Letitia James, the attorney general in New York, said she was leading a group of attorneys general that was investigating Facebook for practices they deemed potentially anticompetitive. In the end, attorneys general from more than 40 states signed the complaint.

The FTC’s investigation has been going on since June of last year.

As James announced at a Wednesday press conference:

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition. By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived to be potential threats.”

One of the other requests of the lawsuit is a requirement that Facebook must notify state officials if they plan to make an acquisition valued at $10 million or more.

Facebook responded on Wednesday, disputing the claims in the two cases. In a statement, Facebook’s vice president and general counsel, Jennifer Newstead, said:

“The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago. The government now wants a do-over, sending a chilling warning to American business that no sale is every final.

“People and small businesses don’t choose to use Facebook’s free services and advertising because they have to. They use them because our apps and services deliver the most value. We are going to vigorously defend people’s ability to continue making that choice.”

A former chairman of the FTC, William Kovacic, said competition watchdogs have the right to change their minds if new evidence suffices — referring to Newstead’s statement about prior approval. Kovacic said:

“There’s nothing in U.S. merger law that says an agency’s decision not to challenge a proposed deal immunizes that deal from future review.”