WASHINGTON – The Federal Trade Commission and 48 states on Wednesday accused Facebook of becoming a social media monopoly by illegally suppressing competition, buying up their rivals, and engaging in heated legal battles that could destroy some of the world’s most popular communications services .
Federal and state regulators, who have been investigating the company for over 18 months, said in separate lawsuits that the purchases of Facebook, particularly Instagram for $ 1 billion in 2012 and WhatsApp for $ 19 billion two years later, eliminated the competition that might one day have challenged the company’s dominance.
Since those deals, Instagram and WhatsApp have grown in popularity, giving Facebook control over three of the world’s most popular social media and messaging apps. The apps helped catapult Facebook from a company founded 16 years ago in a college dorm to an Internet powerhouse worth more than $ 800 billion.
Prosecutors asked Facebook to wind down Instagram and WhatsApp and set new restrictions on future business.
“For almost a decade, Facebook has been using its dominance and monopoly power to crush smaller competitors and eliminate competition, all at the expense of everyday users,” said Attorney General Letitia James of New York, who led the company’s investigation in several states in parallel with the federal agency .
The lawsuits underscore the growing bipartisan and international tsunami against big tech. Lawmakers and regulators have focused on the impact Facebook, Google, Amazon, and Apple are having on commerce, electronics, social networking, search, and online advertising to reshape the country’s economy. President Trump has repeatedly argued that the tech giants have too much power and influence, and allies of President-elect Joseph R. Biden Jr. make similar complaints.
The investigation led to a lawsuit by the Justice Department against Google two months ago, accusing the search giant of illegally protecting a monopoly. At least one more lawsuit from Republican and Democratic officials against Google is expected by the end of the year. In Europe, regulators are proposing tougher laws against industry and have fined billions of dollars for competition law violations.
The lawsuits against Facebook are expected to spark a lengthy legal battle. The company has long denied any illegal anti-competitive behavior and is expected to use its deep source of funds to defend itself. Few major cartel cases have focused on mergers that were approved years earlier. The FTC signed the Facebook contracts for Instagram and WhatsApp during the Obama administration.
If prosecutors succeed, the cases could reshape the company, which has seen unbridled growth. Mark Zuckerberg, CEO of Facebook, has described the liquidation of the company as an “existential” threat.