The US Federal Trade Commission (FTC) has sued Facebook in the past few hours. It accuses the company of anti-competitive behaviour. The purchase of Instagram and WhatsApp, in particular, is a thorn in the side of the competition watchdogs.
The lawsuit accuses Facebook of having pursued a "systematic strategy" in order to eliminate threats to a possible monopoly position. This includes the acquisitions of Instagram in 2012 and WhatsApp in 2014, which are said to have taken away many alternatives to Facebook for consumers. Facebook itself contradicts this account.
46 US states have joined the Federal Trade Commission (FTC) complaint. It is based on internal messages from Mark Zuckerberg, various managers and regular Facebook employees.
Lawsuit against Facebook: Instagram and WhatsApp could regain their independence
"Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive," said Ian Conner, director of the FTC's Bureau of Competition. This includes a permanent injunction that would require the divestitures of WhatsApp and Instagram. The two social networks could thus stand on their own feet again in the future or at least be sold to other companies.
Facebook wrote in a reaction that the company had received the green light from the responsible regulatory authorities for both takeovers. A retroactive reversal would set a dangerous precedent.
Internal emails from Facebook CEO Mark Zuckerberg are interpreted by the lawyers as a concession that Instagram was bought for the purpose of eliminating the competition.
In addition, they are now investigating to what extent the takeover of WhatsApp and the subsequent reconciliation of user data with Facebook may have harmed users and any competitors. The two founders of WhatsApp, Brian Acton and Jan Koum, had left Facebook after disputes with management. Similarly, Instagram co-founders Kevin Systrom and Mike Krieger left Facebook after disputes with the company.
The suit was welcomed by various US politicians. "Rather than competing with Instagram and WhatsApp, it appears Facebook simply bought these firms to expand its dominance," said Democrat Jerrold Nadler. "This should never have happened in the first place, and accountability is long overdue."
Another aspect of the lawsuit is the limitations of Facebook's application programming interfaces (APIs). The company is said to have given external developers the keys necessary for access only under the condition that they do not develop competing functions. Also, the establishment of connections to other social network services or their promotion is prohibited. The FTC describes these as anti-competitive conditions.