Several bodies of the US administration have started a lawsuit against Facebook. They feel that the company is thwarting competitors by simply buying them up when they grow too big.
The prosecutors consist of the Federal Trade Commission and 46 US states. They complain about the ‘buy or bury’ strategy the company is pursuing to nip emerging competitors in the bud, Reuters writes. The only states that don’t participate in de lawsuit are Alabama, Georgia, South Carolina and South Dakota.
WhatsApp and Instagram
In 2012, Facebook acquired Instagram for one billion dollars (830 million euros) and two years later it added WhatsApp to the company for 19 billion dollars (15.7 billion euros). The plaintiffs are now demanding that these takeovers be reversed.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James on behalf of the plaintiffs.
Punishing successful companies
Jennifer Newstead, Facebook’s general counsel, believes that antitrust laws are not intended to punish successful companies. She argues that WhatsApp and Instagram became successful because Facebook invested billions in these companies.
According to Newstead, consumers have actually benefited from Facebook’s acquisitions, pointing at the fact that WhatsApp can still be used for free. Moreover, rivals such as YouTube, Twitter and WeChat are still doing well.
Facebook has not yet responded to questions from the media. In an internal message, Mark Zuckerberg told employees that he does not expect any impact on individual teams or roles and that it is only one step in a process that may take years.