Zuckerberg's Deals Are Central to Antitrust Cases
Well it did happen. The ftc in coalition with forty six state attorneys general plus guam and the district of columbia have sued facebook instagram and whatsapp. Acquisitions were used to stifle competition in the marketplace. I'm going to point out that. The ftc suit and the state's suit are two different cases. These are not combined which i think could be important because number one facebook argue that. The ftc is being disingenuous. It signed off on these acquisitions years ago so they can be like no take backseat on this whereas the states never signed off on anything so they can claim harm more directly and second the ftc's lawsuit at least to my reading is more you know. Throw everything and the kitchen sink in. Their people are reading everything they want to. Intuit consumers have seen their privacy harmed. Advertisers have choice limited. The marketplace has been distorted. Whereas i think the state's case is more directly about the marketplace being distorted conversely though the ftc's suit explicitly seeks to unwind the instagram and whatsapp acquisitions to make those spun out as independent companies whereas the states cases in my opinion more vague. About what they're looking for in terms of dress. But i'm not a lawyer so feel free to correct those takes but quoting the verge for nearly a decade facebook has used its dominates and monopoly power to crush smaller rivals and snuff out. Competition new york state attorney general letitia. James said in a press conference today. James is leading the group of attorneys general quote. Facebook used vast amounts of money to acquire potential rivals before they could threaten the company's dominance and quote the federal trade commission brought a separate lawsuit against facebook on similar grounds announced at the same time as the state's lawsuit. The ftc case goes further than the state case explicitly calling on the court unwind the acquisitions of instagram and whatsapp spinning off both into independent companies quote. Our aim is to rollback facebook's anticompetitive conduct and restore competition so that innovation and free competition can thrive said ian connor director of the ftc's bureau of competition in a statement. The ftc case also echoes the state attorney. General's claim about anticompetitive use of platform power particularly facebook's practice of quote cutting off access to blunt perceived competitive threats and quote the ftc case sites facebook's decision to block vines friend finding feature after the twitter acquisition as a particularly flagrant instance of this behavior and quote facebook of course had a response to the lawsuit saying they are revisionist history and that this whole case is unprecedented. Jennifer newstead facebook's general counsel wrote quote the federal trade commission and state attorneys general today attack to acquisitions that we made instagram in two thousand twelve. And what's happened. Two thousand fourteen. These transactions were intended to provide better products for the people who use them and they unquestionably did both of these acquisitions were reviewed by relevant antitrust regulators at the time the ftc conducted an in-depth second request of the instagram transaction in two thousand twelve before voting unanimously to clear it. The european commission reviewed the what's app transaction in two thousand fourteen and found no risk of harm to competition in any potential market regulators. Correctly allow these deals to move forward because they did not threaten competition now many years later with seemingly no regard for settled law or the consequences to innovation and investment. The agency is saying it. Got it wrong and wants a do over in addition to being revisionist history. This is simply not how the antitrust laws are supposed to work. No american antitrust enforcer has ever brought a case like this before and for good reason. The ftc states stood by for years while facebook invested billions of dollars and millions of hours to make instagram and whatsapp into the apps that users enjoy today and notably to ftc voted against the action that the ftc has taken today now. The agency has announced that no sale will ever be final no matter the resulting harm to consumers or the chilling effect on innovation when we acquired instagram and whatsapp. We believe these companies would be a great benefit to our facebook users and that we could help transform them into something even better and we did this lawsuit. Risks sowing doubt and uncertainty about the us government's own merger review process and weather acquiring businesses can actually rely on the outcomes of the legal process and quote.