mollyfamwatWASHINGTON – The Federal Trade Commission and a bipartisan group of 46 states have filed broad antitrust complaints against the U.S. Department of Commerce.
Facebook Inc.
FB – 1.93%.
Wednesday, the social media giant says he is involved in a year-long campaign to buy or freeze emerging technology companies that could one day become competitors.
The FTC’s case is the most ambitious of recent times as it tries to solve the Facebook problem before buying the Instagram photo sharing application and the WhatsApp messaging service. This came only a few weeks after the Ministry of Justice had filed a cartel lawsuit against the flagship of Google’s search engine. Within a generation, each federal agency now has its own company, reflecting the extent of U.S. concerns about the power of dominant online platforms.
After voting 3 or 2 times, the FTC took the case to a federal court in Washington after an investigation that lasted more than a year. Commission staff worked for months to prepare the file and recommended that the CTC vote to open the file. Two FTC Democrats have joined the Republican president.
Joseph Simon
in most cases a sign that after the election of the President the case is likely to move in the same direction; and
Joe Biden
take over.
New York State Attorney General Leticia James spoke of a massive antitrust lawsuit against Facebook filed by the Federal Trade Commission and a non-partisan group of 46 Attorneys General against the company’s tactics against its competitors. Photo: Sol Loeb/AFP by Getty Images
Personal social networks are central to the lives of millions of Americans.
Ian Conner,
Director of the FTC Competition Bureau. Facebook’s actions to secure and maintain its monopoly deprive consumers of competitive advantages. Our goal is to stop Facebook’s anti-competitive behavior and restore competition so that innovation and free competition can flourish.
Democratic Attorney General of New York
Letitia James
announced a lawsuit against the states, including the District of Columbia and Guam.
For almost a decade Facebook has used its dominance and monopoly power to crush its smaller competitors and push rivals aside, all to the detriment of daily users, James said at a press conference Wednesday. She argued that Facebook exploited its competitive dominance to gain user benefits and earn billions by turning personal information into dairy cows.
Mr. Biden’s transition team didn’t comment directly on the investigations.
Facebook stated that the lawsuit was a regulatory investigation and noted that the FTC had previously approved its transactions with Instagram and WhatsApp.
New York State Attorney General Leticia James said that Facebook has been trying to exploit users and make billions by turning personal information into dairy cows.
Photo:
Cathy Willens/Presse Associée
The government now wants a new beginning and is sending a chilling warning to U.S. companies that no sale will ever be final, said the vice president and Facebook’s general counsel.
Jennifer Newsted.
Individuals and small businesses don’t choose Facebook’s free services and advertising because they have to, they use them because our applications and services offer the best value.
Federal and state level coordination indicates the intensity of the legal pressure Facebook faces and the leading role that state law enforcement plays in antitrust disputes with the country’s most powerful technical companies. Some states have also joined the Ministry of Justice in suing Google, and two other coalitions of states weigh the pros and cons of the research giant, a unit that
Alphabet Inc.
For Facebook, Wednesday’s motions introduce a confrontation with the government, which the founder and CEO
Mark Zuckerberg
considered existential in the past. Zuckerberg, who personally developed many of the actions in the lawsuits, expressed confidence that Facebook would prevail in court.
According to Eric Schmidt, antitrust laws should not be used to regulate something as complicated as the Internet. Photo: Alex Wong/Getty Images
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These cases present Facebook with one of the biggest challenges in its evolution in 16 years, from a university start-up to a social media giant. The Facebook application alone has 196 million active users in the United States and Canada every day, and more than 2.5 billion people worldwide use Facebook products.
In the early stages of Facebook, public attention focused on the platform’s ability to grow and make money, identifying cultural touchpoints and viral trends. But in recent years, the emphasis has been on the power of Facebook: its extensive data collection and ability to shape users’ emotional state, accelerate the spread of hate conspiracy theories, and potentially influence democratic processes, including elections. The commercial impact of the company was also closely examined, as it is able to colour individual applications, enter into preferential contracts and use its financial strength to acquire promising start-ups.
Facebook says its critics have no valid reason to claim that the companies it buys would be its main competitors if it remained independent. Platforms like Instagram have been so successful, precisely because Facebook bought them and invested heavily in their development, according to Zuckerberg.
For several months now, Facebook has been building up its case against the likely FTC lawsuit and intends to argue that the Commission’s efforts to address its past acquisitions will challenge established laws, harm consumers and cost billions of dollars if the government tries to dissolve them.
Two complaints tell a similar story. The FTC and governments say Facebook prefers to buy out companies rather than compete with them. Facebook admitted in 2011 that Instagram is becoming a real competitor in the field of mobile phone photos and that this could threaten the position of the company, there are lawsuits underway. By buying Instagram, this threat was neutralized by deterring all other photodeling applications, the trial said.
The Commission also claims that the WhatsApp agreement has raised another concern for Facebook, making it difficult to launch future mobile messaging applications and threatening to penetrate the social media sector.
Most of Facebook’s maneuvers were supported by the acquisition of the Israeli company Onavo Mobile Ltd, which has developed a tool to monitor the use of dozens of applications that Facebook can use to identify competing threats, according to a government complaint.
The lawsuits also claim that Facebook is an awful competitor that prevents third party application developers who want to offer services that violate Facebook’s core functionality from accessing the platform.
The state’s indictment states that Facebook’s behaviour is an invasion of privacy. The company’s monopoly position has allowed it to withdraw from previous promises and collect more aggressive data on user activities, the states said.
Mergers and acquisitions must be reviewed by the government before they are completed and the FTC has authorized the technology giant to acquire Instagram and WhatsApp in 2012 and 2014, respectively. Of the dozens of companies taken over by Facebook in the past decade, some need government approval, while others, smaller companies, have not.
The complaint was filed two months after the Antitrust subcommittee of the U.S. House of Representatives issued a report on the dominance of large technology companies. The conclusion was that Facebook has a monopoly, isolated from competitive threats, because all potential competitors face high barriers when trying to challenge the technology giant with competing products. The panel concluded that Facebook has also been able to maintain and expand its dominance by acquiring companies that could pose a threat and by selectively excluding other applications from building services on its platform.
Mr Zuckerberg told Parliament in July that Facebook is still facing fierce competition. He emphasized the popularity of the video sharing application TikTok, which has attracted hundreds of millions of users worldwide.
During a hearing with the Senate Judiciary Committee on Tuesday, Jack Dorsey of Twitter Inc. and Mark Zuckerberg of Facebook Inc. said their companies had performed better in protecting the integrity of the 2020 elections. Photo: Fox
Last year, Facebook made a record $5 billion payment with the FTC to end a non-antitrustrust research into consumer privacy violations. Facebook said it had taken a big step forward in the area of privacy and that the agreement was part of restoring public confidence.
Some legislators, competition law experts, and consumer advocates have criticized the FTC for not doing enough to curb the growing dominance of large technology companies. Facebook’s complaint constitutes a breach of the Commission’s reputation for not taking risks in its enforcement activities. In early 2013, it was decided not to start antitrust proceedings against Google after more than a year of investigating the company. The investigating giant escaped without any legal charges.
The FTC splits the Anti-Monopoly Authority into a Department of Justice, but a bipartisan committee of five must have a majority vote to file a complaint. FTC President Simons, a Republican appointed by President Trump, obtained that majority during the president’s transition period, as Biden’s board may form a committee after he takes office.
Rohit Chopra
и
Massacre of Rebecca
voted with Mr. Simons. Republican Commissioners Noah Phillips and Christine Wilson voted no.
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It will probably take years to solve these cases. The Commission and the states cannot impose changes on a company; they must first prove in a lawsuit against Facebook that it has violated federal antitrust law and that these changes are necessary. The social media giant has already started integrating the various services he has acquired.
In addition to encouraging transactions in the past, the lawsuit seeks to prohibit Facebook from engaging in anticompetitive practices in the future, such as imposing restrictive conditions on software developers.
When the Instagram Agreement was revised in 2012, some FTC members were concerned about the agreement’s impact on competition, but were not sure if they could win the case, reports the Wall Street Journal.
Facebook is also subject to increased antitrust control in Europe. The European Commission, the supreme antitrust authority of the European Union, is conducting a preliminary investigation into the company’s control over user data and its use, in particular for advertising purposes. The investigation may be formalised or closed.
It’s a huge survey, a lot of data is coming in, executive Vice-President of the European Commission.
Margrethe Westeger
said at a press conference last week.
Facebook has declared its commitment to the investigation.
-Jeff Horvitz and Sam Schechner contributed to this article.
Write to Brent Kendall at [email protected] and John D. McKinnon at [email protected].
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