New York, USA (CWBN)_ A law suit was filed against Facebook by the New York Attorney-General’s office a few days ago in a bid to remove WhatsApp and Instagram from the company’s grasp, after 45 federal and other regulators accused the company of maintaining a monopoly by buying off its competition.
Attorney General Letitia James said, “For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, and snuff out competition, all at the expense of everyday users.”
In 2012, Facebook purchased Instagram, a photo and video sharing platform, which then consisted of just thirteen members of staff, at USD 1 billion, and later WhatsApp for the exorbitant price of USD 16 billion, in 2014.
Facebook’s net worth now stands at around USD 800 billion, indicating that it has quadrupled since the purchases were made.
Responding to the allegations, the company’s legal representative, Jenifer Newstead said that, “Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses,” Facebook said, describing the government’s arguments as “revisionist history”.
She also noted that the company is prepared to “vigorously” defend itself.
Former Chair of the Digital, Culture, Media and Sport Select Committee, MP Damien Collins told Tech Tent that “It was always going to take leadership by the authorities in America to bring the anti-trust case against Facebook and to make the case for some form of separation of the different businesses.”
“What these documents showed was how Facebook used its market power to put pressure on other companies to do deals on data that favoured Facebook; to give privileged access to data to companies that were important to Facebook and spent a lot of money with them; how it used data to analyse the apps people use, so it could determine which apps were potentially a threat.” he added.
Former Head of the Office of Fair Trading, John Fingleton also noted that “In the last 30 or 40 years we’ve seen competition has been about protecting consumers, not protecting competitors. But a lot of the cases one sees more recently have much more of a flavour of protecting competitors.”
