eBusiness

Facebook asked to sell Instagram and WhatsApp

Instagram and WhatsApp

The lawsuit against the alleged monopoly of Facebook continues. The American Federal Trade Commission (FTC) filed court proceedings against Facebook, Wednesday (9/12/2020). The FTC asks Facebook Inc. to sell the service Instagram and WhatsApp , for violating the law antitrust .

Instagram and WhatsApp

In its lawsuit, the FTC said that Facebook had implemented a systematic strategy to minimize competition by buying its competitors, namely WhatsApp in 2014 and Instagram in 2012. The agency said Facebook is taking advantage of its market dominance to collect user data and reap profits from ad revenue.

New York Attorney General Letitia James said that Facebook is using its monopoly power to crush its competitors and remove competition. “It is very important for us to block this predatory acquisition of this company and restore confidence in the market,” explained James.

James himself is chairman of a group of attorneys general in the United States who are working with the FTC to investigate the alleged monopoly of Facebook. There are around 47 Attorneys General who are members of this group. James accused Facebook of practicing by opening its platform to third-party application developers.

If the developer of the third application is considered a threat, Facebook will stop it suddenly. James believes his lawsuit against Facebook will succeed by setting the AT&T case a precedent.

For information, in 1974, the US Department of Justice filed an antitrust lawsuit against AT&T because it was considered to be using its dominance to suppress telecommunications competition at that time.

Then in 1982, the company AT&T released the Bell Operating Companies which provided local telephone services in the United States and Canada. Coming back to the matter of Facebook , Ian Conner, director of the FTC’s Office of Competition, said that personal social networks are very important to millions of Americans.

What Facebook did with its dominance made consumers not benefit from the competition. “Our aim is to stop Facebook’s anti-competitive actions and restore competition so that innovation and free competition can flourish,” said Conner, summarized from ABC News, Friday (11/12/2020).

Facebook response Facebook has responded to the lawsuit and called the government’s actions “revisionist history” punishing successful businesses. Facebook also pointed out that the FTC opened up the acquisition of Instagram and WhatsApp a few years ago.

“Both acquisitions were reviewed by the relevant antitrust regulators at the time,” wrote Facebook general counsel Jennifer Newstead on Facebook’s official blog. Facebook is the largest social network in the world today with 2.7 billion users. Facebook’s market share has almost reached 800 billion US dollars.

The big boss of Facebook, Mark Zuckerberg is also the fifth richest person in the world. In 2012, Facebook bought Instagram for 1 billion US dollars. In an internal e-mail, Zuckerberg admitted that before acquiring Instagram, he was worried that Instagram would become a threat.

Zuckerberg promised to run Facebook and Instagram separately and independently. But gradually, that intention changed. In the past few years, Facebook has aggressively voiced its wish to integrate all its platforms, namely Facebook (Messenger), WhatsApp, and Instagram. Recently, this integration can be felt.

Instagram users, for example, can send messages to Messenger via direct messages on Instagram. Newstead said the acquisition of Facebook was successful because it took risks, made investments, innovated, and provided value to its users and shareholders. “Our acquisitions are good for competition, good for advertisers, and good for people,” he wrote.

 

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