Facebook is potentially staring down the barrel of a gun with a new lawsuit being filed by the US government, that seeks to break up Facebook due to its “anticompetitive practices.”
The social media giant is actually facing two lawsuits. One from the Federal Trade Commission, and one from a collection of states. Both come from different parties but it looks like both also want the same thing. Facebook to lose its iron grip on the industries with which is operates in.
The state suit however appears, at least for now, to be a little bit less detrimental to Facebook’s future operations. While the FTC lawsuit is the one seeking to break up Facebook, the state suit seems to merely request that Facebook alter how it does certain things going forward. Specifically with acquiring new companies and products.
The FTC lawsuit says Facebook needs to break up its empire
In the lawsuit, the FTC states that Facebook has abused its power in the digital marketplace.
If the FTC wins, Facebook would need to divest its assets. Primarily Instagram and WhatsApp, to help promote a more fair and competitive marketplace moving forward. But whether or not that happens is anyone’s guess at this point. A resolution to this suit is not something one should expect overnight.
If any of Facebook’s past government-related lawsuits and court appearances are anything to go by. Seeing as how they’ve all taken many months to reach any sort of conclusion.
With this particular suit, Facebook is described as denying consumers the benefits of competition by entrenching and maintaining its monopoly. This is according to the Director of the FTC’s Bureau of Competition, Ian Conner.
Who also stated that the FTC’s goal is to reverse Facebook’s anticompetitive hold on the market so that competition can thrive.
The state suit wants to be in the loop about Facebook’s future acquisitions
When it comes to the state lawsuit, which involves dozens of states and 48 attorneys general, Facebook may end up having to keep US states in the loop with future purchases.
It’s requesting that Facebook inform and consult states prior to any future acquisitions. But only if they cost the company more than $10 million. Instagram and WhatsApp were both well over that number. Which would put them both within the realm of this new requirement being set forth by the lawsuit if things ruled in favor of the states and the sales happened after that point.
Since both companies were purchased years ago however, they’re being used as examples of what happens when Facebook’s acquisitions go unchecked.
Both suits believe that Facebook is using its money and dominance to put rivals out of business. Allowing it to roam free without any competition at all. Because it can simply buy the businesses that offer competing features or services.