US Lawsuit against Facebook

On Wednesday, Facebook (FB) was sued in dual antitrust litigation by hundreds of states and the federal government, arguing that the social media giant violated its supremacy in the internet marketplace and engaged in anti-competitive activity. Attempting to break up the social networking giant over allegations that is engaged in unethical, anti-competitive practices to purchase, bully and destroy its competitors.

 

These criticisms primarily dispute the purchase of two businesses Instagram and WhatsApp by Facebook. It has been seen by the investigation that the purchases of these two Social Media Apps effectively helped Facebook exclude increasingly strong competitors from the digital arena, helping the tech titan to enrich itself at the detriment of consumers with advertisement dollars, who have less social networking alternatives at their disposal as a result.  

The U.S. government and 48 state officials filed historic antitrust lawsuits against Facebook. The twin complaints filed in federal court say that Facebook acted for years as an unconstitutional cartel under its CEO, Mark Zuckerberg.

These complaints against Facebook seems to be resolved over the years as it generates a high profile clash between U.S authorities and one of the most profitable firms of Silicon’s valley. Antitrust authorities are trying harder in court to force Facebook to sell these two Apps (WhatsApp and Instagram). 

In 2012, Facebook revealed that it was purchasing Instagram for $1 billion; two years later, a $19 billion WhatsApp deal was announced. The lawsuits come around 14 months after Letitia James, Attorney General of New York, announced that her office was joining a coalition of attorneys general to investigate alleged anti-competitive activity on Facebook. Meanwhile, since June 2019, the FTC has been undertaking its own antitrust probe of Facebook.

Rather than competing on the merits, Facebook is trying to use its power to crush the competition so they take full advantage of users and make billions by transforming user information into a cash cow, Letitia James - New York Attorney General says in a statement.

The U.S. policymakers have maintained a hands-off attitude to Facebook and its Silicon Valley rivals for years, hoping to incubate their continuing growth. The lack of oversight was in stark contrast to Europe, which saw extreme challenges in the tech sector and its attitude of expansion at all costs and tried to penalize Facebook and other firms in retaliation. The supposed methods of Facebook to squash its rivals, the lawsuits claim, have resulted in less user options because it is hard to transfer your data to another social network. They also contributed to weaker protections for privacy as well.

But the presidential election of 2016 will inevitably awaken U.S. politicians to the possible pitfalls of internet companies, including Facebook,
While the WhatsApp and Instagram deals may not have been objected to by regulators at the moment, antitrust agencies have the freedom to alter their minds in light of fresh information, said William Kovacic, a former FTC chairman. 

According to its financial statements, much of Facebook's scrutiny include the firms it has acquired to create up a vast following that now totals more than 3 billion users across its app portfolio. Some legal analysts, including US senators, have raised concerns about whether Facebook CEO Mark Zuckerberg wanted to neutralize competitive risks by devouring them.

Judicial action on Wednesday makes Facebook the second multinational software corporation to be brought to court this year over competition issues by US and state government officials. In October, a lawsuit against Google was brought by the Justice Department and 11 states, arguing that it had stifled competition to retain its dominant position in internet search and advertising networks. 

A court the decision that broke up Facebook or puts such restrictions on actions may have a wide-ranging impact on what new start-ups will emerge and what people find on the demand for goods.