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Facebook risks Instagram -WhatsApp breakup in antitrust case

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The Federal Trade Commission and state attorneys general led by New York said they filed antitrust complaints against Facebook

Facebook Inc. was sued by U.S. antitrust officials and a coalition of states that want to break up the company by unwinding its acquisitions of Instagram and WhatsApp, deals the government says were part of a campaign to illegally crush competition.

The Federal Trade Commission and state attorneys general led by New York said they filed antitrust complaints against Facebook Wednesday, alleging the company stifled competition from rivals in order to protect its monopoly in social media. The lawsuits seek court orders unwinding Facebook’s acquisition of Instagram and WhatsApp, according to copies of the complaints provided by the states and the FTC.

The cases represent the biggest regulatory attack against Facebook in the company’s history. They follow the Justice Department’s October lawsuit against Alphabet Inc.’s Google. Together, the Google and Facebook actions mark the most significant monopoly cases filed in the U.S. since the Justice Department sued Microsoft Corp. in 1998. Unlike the Google case, the Facebook complaints seek a court order breaking up the company.

Facebook shares fell 1.9% to close at $277.92 after falling more than 4% earlier.

“Personal social networking is central to the lives of millions of Americans,” Ian Conner, the director of the FTC’s Bureau of Competition, said in a statement. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
Facebook has squashed or hindered what the company saw as potential threats, said New York Attorney General Letitia James during an online press conference.
Facebook used “vast amounts of money” to acquire companies that could potentially threaten its dominance, particularly Instagram and WhatsApp, she said. The effort was meant to “squeeze every bit of oxygen out of the room.”

Facebook became a prime target for President Donald Trump in the last two months of his administration. Last week, he threatened to veto the annual U.S. defense authorization bill unless Congress adds a rider to abolish the law that protects technology companies, including Facebook, from liability over most content posted by users. The demand followed months of attacks by Trump and some other Republicans, who accused technology platforms of suppressing conservative views after they began flagging misleading and false posts about the pandemic and the election. Those claims aren’t part of the suits filed Wednesday.

Facebook and its tech peers are facing a groundswell of bipartisan antagonism over their control of digital commerce and their ability to influence what users watch and read.

The investigations into the companies began in the summer of 2019 after the FTC and the Justice Department agreed on a plan to divide up scrutiny of Facebook, Google, Amazon.com Inc. and Apple Inc. A House report, which was released in October following a 16-month investigation, determined the four companies are abusing their market power as gatekeepers of the digital economy.

It will be up to President-elect Joe Biden’s Justice Department to carry the Google case forward, while the Facebook case will fall to whomever Biden picks as FTC chairman if Joe Simons, who was appointed by Trump, leaves the agency. Simons, a Republican, voted with the agency’s two Democrats to approve the Facebook complaint. The other two Republicans voted against it.

Facebook called the complaints “revisionist history,” saying it was Facebook’s investments in Instagram and WhatsApp that made them successful.…

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