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FTC sues Facebook, calls for undoing of Instagram and WhatsApp acquisitions

The Federal Trade Commission has announced that it is suing Facebook. The lawsuit accuses Facebook of “illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct.” A separate lawsuit has also been filed by a coalition of 48 attorneys general led by New York AG Letitia James.

The FTC lawsuit focuses on Facebook using its power to eliminate threats to its monopoly and the effect the actions have had on consumers.

“Personal social networking is central to the lives of millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition. “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.”

The FTC lawsuit specifically points to the acquisitions of Instagram and WhatsApp as examples of anticompetitive behavior. The FTC is seeking a permanent injunction that could include the unwinding of the Instagram and WhatsApp:

The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions.

Furthermore, the FTC complaint says that Facebook has imposed anticompetitive behaviors against third-party software and removed access to “valuable interconnections to its platform” including APIs. One specific example that the FTC points to is Facebook shutting down the API used by Vine in 2013:

The complaint alleges that Facebook has enforced these policies by cutting off API access to blunt perceived competitive threats from rival personal social networking services, mobile messaging apps, and other apps with social functionalities. For example, in 2013, Twitter launched the app Vine, which allowed users to shoot and share short video segments. In response, according to the complaint, Facebook shut down the API that would have allowed Vine to access friends via Facebook.

You can read the full announcement from the FTC here.

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