FTC Files Lawsuit To Break Up Facebook

WHAT YOU NEED TO KNOW:

• The Federal Trade Commission’s lawsuit requests a federal court to impose on Facebook the auction of its owned platforms such as WhatsApp and Instagram.
• In its statement, FTC said companies like Facebook maintain control of the business by obtaining companies that could be a threat on the platform.
• Facebook acquired WhatsApp in 2014 and Instagram in 2012 in a deal approved by the FTC with 5-0 votes in favor.  

On Wednesday, the Federal Trade Commission (FTC) files charges to disband Facebook, requesting a federal court to force the social media giant to auction its properties such as WhatsApp and Instagram, making them lone and separate businesses.

FTC wrote in its charges filed in a Washington, D.C. federal court that Facebook has preserved its domination over the platform by acquiring companies that could be potential industry threats and by enforcing restrictive guidelines that excessively hamper real or possible rivals that the business does not or cannot obtain.

The complaint also asks the court to implement a reconstruction or divestment of assets, businesses including WhatsApp and Instagram, and many other possible assets and deals that the court may include.

The move is a significant stride that’s been planned for many years, with Facebook and numerous other large U.S. tech firms have snowballed in the last ten years, barely with government intrusion.

But the absence of inquiry has changed lately following successive lawsuits that now impend the control of giant tech firms in the U.S that have come to be the most valued companies worldwide.

From 48 states and regions are attorneys general that confirmed they are filing charges against Facebook, indicating the concerns from all sides about how powerful Facebook and its CEO, Mark Zuckerberg, have become in the online world.

Immediately following the news, the social media giant’s share price dipped close to 4 percent before cutting its losses.

Facebook’s critics, such as Sen. Elizabeth Warren, D-Mass., is calling for the company’s dissolution to one of its co-founders, Chris Hughes, who the previous year composed a 6,000-word breakup case but it did not make it to the court.

The leading social media company said it was appraising the two complaints, noting that the FTC permitted WhatsApp and Instagram’s acquirement before.

In a statement, Facebook also stressed that the FTC gave them clearance in all their acquisitions, and years after, the agency changed its policies, disregarding the impact the move will bring to the users and the business community who uses the platform daily.

With FTC’s 5-0 approval at that time, Facebook acquired Instagram in 2012 for $1 billion even if the app is not commonly used. In 2014, Facebook bought WhatsApp for an estimated amount of $22 billion.

Last year, Facebook arranged to pay $5 billion to the FTC to halt an inquiry into the company’s privacy regulations.

Source: NBC News