The Federal Trade Commission and 46 states sued Facebook Inc. on Wednesday, accusing the social-media giant of buying and freezing out small startups to choke competition, reports The Wall Street Journal.
The FTC’s sweeping antitrust case seeks to force Facebook to unwind its acquisitions of WhatsApp and Instagram, two of its landmark deals. The states filed a separate and similar lawsuit, alleging a lack of competition has harmed consumers, including by weakening privacy protections.
The lawsuits come weeks after the Justice Department brought a case alleging Google was illegally maintaining a monopoly in its search business. Collectively, the cases reflect U.S. concern about the power of dominant online platforms.
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” said Ian Conner, director of the FTC’s Bureau of Competition. “Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
New York Attorney General Letitia James, a Democrat, asserted that Facebook “has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” and made “billions by converting personal data into a cash cow.”
Facebook fired back by noting the FTC had previously approved the Instagram and WhatsApp transactions.
“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” said Vice President and General Counsel Jennifer Newstead. “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.”