Adding another chapter to the U.S. government鈥檚 clamp down on 鈥渂ig tech鈥, the on Wednesday, alleging the company is 鈥渋llegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct.鈥 Following a broad investigation in cooperation with 46 states, the District of Columbia and Guam, the FTC came to the conclusion that Facebook is systematically suppressing competition, taking particular offense in the company鈥檚 acquisitions of Instagram and WhatsApp dating back to 2012 and 2014, respectively.
According to a statement of FTC Bureau of Competition Director Ian Conner, the Commission is seeking to 鈥渦nwind Facebook鈥檚 prior acquisitions of Instagram and WhatsApp鈥, a bold target considering that the FTC greenlit the after an in-depth review and the European Commission found no threat to competition stemming from the WhatsApp in a similar investigation in 2014.
In a published by Facebook, the company鈥檚 Vice President and General Counsel Jennifer Newstead calls the lawsuit 鈥渞evisionist history鈥, pointing out that Facebook invested billions of dollars to make Instagram and WhatsApp what they are today and warning that 鈥渢his lawsuit risks sowing doubt and uncertainty about the US government鈥檚 own merger review process and whether acquiring businesses can actually rely on the outcomes of the legal process.鈥
As the following chart shows, Facebook does have a point when saying that the companies it acquired in 2012 and 2014 were nowhere near where they are today. Instagram had around 30 million users at the time of its acquisition, while users when Facebook came knocking.
