US federal and state antitrust enforcers on Wednesday filed suits against Facebook Inc claiming the social media giant abused its dominant position and seeking to unwind its acquisitions of messaging services Instagram and WhatsApp.
Separate suits filed by the US Federal Trade Commission (FTC) and a coalition of state officials called for the divestment of Instagram and WhatsApp, services that are part of the Facebook “family” of applications.
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” said Ian Conner, director of the FTC’s Bureau of Competition. “Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
Photo: Reuters
A separate legal action was filed by antitrust enforcers from 48 US states and territories.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James, who leads the coalition.
The suits allege Facebook sought to squelch competition by acquiring the messaging applications — Instagram in 2012 and WhatsApp in 2014.
The action presages a fierce court battle seeking to force Facebook to divest the apps that have become an increasingly important element of the business model of the California giant and integrated into its technology.
Facebook said it would “vigorously” defend its actions and denied abusing its position.
“Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses,” Facebook general counsel Jennifer Newstead said in a statement.
“Instagram and WhatsApp became the incredible products they are today because Facebook invested billions of dollars, and years of innovation and expertise, to develop new features and better experiences for the millions who enjoy those products,” she said.
Newstead said these deals had been approved years ago by the FTC, which she said meant “the government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”
Some analysts said the antitrust cases would have difficulty proving Facebook harmed consumers since its services are largely free.
Jessica Melugin of the Competitive Enterprise Institute libertarian think tank called the actions “political theater dressed up as antitrust law,” adding that “a billion consumers worldwide have benefited from Facebook’s purchase of Instagram and WhatsApp.”
Cleveland State University law professor Christopher Sagers said the case might have merit because Facebook “has been an unabashedly predatory and exclusionary bully in every sector it’s been involved in.”
However, he added that “American antitrust law is now so hard to enforce in all cases, especially in cases like this, involving no conspiracy among competitors, and rather involving only one big firm’s unilateral conduct.”
The FTC announced earlier this year it would review acquisitions made by five “Big Tech” firms over the past decade, opening the door to a wave of potential antitrust investigations.
The consumer protection agency said it would review deals made by Amazon.com Inc, Apple Inc, Facebook, Microsoft Corp and Google parent Alphabet Inc since 2010 amid growing complaints about tech platforms that have dominated key economic sectors.
The US Department of Justice, which shares antitrust enforcement with the FTC, in October sued Alphabet, accusing the Silicon Valley giant of maintaining an “illegal monopoly” in online search and advertising, and opening the door to a potential breakup.
Eleven US states joined that case.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
RSS