The lawsuits are “attacks on what Facebook did long ago,”
the company wrote in a blog post, adding the suits fail to prove that Facebook
harmed competition or consumers.
The lawsuits were filed in December by the Federal Trade
Commission and a group of 48 attorneys general and allege that Facebook has
acted as an illegal monopoly for years. The suits were the culmination of
months of investigations and primarily took issue with two of Facebook’s
largest acquisitions: photo-sharing app Instagram and popular messaging app
WhatsApp.
Facebook wrote in its blog post that the FTC had not
demonstrated that the company holds monopoly power and that the agency had
previously reviewed both the Instagram and WhatsApp deals and let them proceed.
“Antitrust laws are intended to promote competition and
protect consumers,” the company wrote. “These complaints do not credibly claim
that our conduct harmed either.”
The lawsuits are perhaps the most significant legal threats
to Facebook’s business in its more than 16-year history and demonstrate the
government’s changing attitudes toward Facebook and its fellow tech giants.
Once darlings of industry, the companies have been positioned by critics as the
poster children of corporate greed and market power.
The chief executives of Facebook, Google, Apple and Amazon
were hauled before Congress last summer in a high-profile grilling over
antitrust concerns. Another hearing with some of the same executives has been
scheduled for later this month. Various regulatory agencies and state attorneys
general have been investigating the companies, too.
The giants have been accused of violating consumer privacy,
as well as unfairly shutting out competitors and restricting the market with
major acquisitions and by controlling multiple pieces of major business lines.
The Justice Department in October sued Google over antitrust
concerns, alleging the company relied on a mix of special agreements and other
problematic business practices to secure a dominant position in online search.
The FTC and states followed with their suits against
Facebook in December, setting up an ongoing showdown against Big Tech.
In its suit against Facebook, the FTC alleges that the
acquisitions of Instagram and WhatsApp — which both have huge and loyal
subscriber bases — served to help Facebook remove potential powerful rivals
from its growth path. Investigators have said that Facebook scoops up smaller
competitors to avoid future threats.
Facebook bought Instagram for $1 billion in 2012 and
WhatsApp for $19 billion in 2014. Neither deal was blocked by regulators.
The suit alleges the two products also help Facebook rake in
advertising dollars, its main moneymaking business, at the cost of users who
now have fewer social media options. Facebook has insisted that people use its
free services because they like to, not because they have to.
The state attorneys general characterized Facebook‘s
strategy toward competitors as “buy-or-bury.”
But some skeptics have said that U.S. antitrust cases could
be difficult to win, even as the companies have expanded to become some of the
most powerful in the world. That’s because they provide many of their services
free to consumers, and consumer harm and increased prices are considered key
tests under established law.
Still, the Biden administration has already tipped its hand
toward maintaining the previous administrations‘ tough stance on tech. The
White House is expected to nominate Lina Khan, whose work has argued for
expanding the interpretation of antitrust laws from just looking at immediate
consumer harm, to a position at the FTC. Tim Wu, another critic of tech giants,
was recently appointed to the White House National Economic Council.
Facebook was expected to ask for dismissal of the lawsuits.
The agencies are expected to respond to the motion next month.
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