Move over, Rich Uncle Pennybags, Facebook founder Mark Zuckerberg is coming for your gig -- well, at least in the eyes of the FTC. Earlier today, the government agency announced that they, along with 48 state attorney generals, are suing Facebook, which owns WhatsApp and Instagram, claiming the company maintains an illegal monopoly -- and not a bootleg version of the friendship-ruining board game. The motion alleges that after a "lengthy" investigation, the company's acquisitions of WhatsApp in 2014, and "up-and-coming rival" Instagram in 2012, alongside harsh non-compete conditions, were, in fact, unlawful. "This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition," reads a statement from the Agency's website.
"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," New York AG Letitia James said of the lawsuit. "By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived as potential threats."
As a result of the "groundbreaking" lawsuit, marking one of the first major legal challenges to big tech, the social networking conglomerate may be forced to divest its assets, most notably, selling Instagram and WhatsApp, and asking government permission for entering any new mergers or acquisitions valued at more than $10 million, CNN reports.
As many organizations would be when hit with a massive, investigation rife lawsuit, Facebook doesn't seem too excited about their new court date. "The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago," Jennifer Newstead, who acts as Facebook's VP and General Counsel explained in a statement. "The government now wants a do-over, sending a chilling warning to American business that no sale is ever final." If only that was true when trying to refund my train ticket home for Christmas ...
Although Newstead is correct about lawmakers permitting Facebook's major acquisitions at the time of purchase, some experts say take-backs are pretty darn legal. "There's nothing in US merger law that says an agency's decision not to challenge a proposed deal immunizes that deal from future review," Former FTC Chair William Kovacic said.
Moral of the story? Stay in school kids. Literally. Harvard degrees don't get you sued by the FTC.