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Facebooks Lawsuits Demands It Dissolves Its Subsidiaries, WhatsApp And Instagram


On Wednesday, the coalition of U.S. states in conjunction with the Federal Trade Commission, FTC, filed a lawsuit against Facebook Inc. The lawsuit is simply against the method in which the social media company conducts business, which it labeled their conduct as the “buy or Bury” business strategy, especially in acquiring rivals, which turns out to eliminate the chance of a competitive marketplace.

Last week, WhatsApp and Instagram were highlighted as the case study of the lawsuit against the social media company, which is expected of the accused to sell off its prized assets if the Federal agency and its coalition of prosecutors win the case.

Lawsuits against tech companies have been frequent lately, and it also shows the agency’s responsiveness in implementing its policies on defaulters as a means to hold them responsible for their business practices, without exception to high profiled tech companies.

The lawsuit also represents an odd occasion where the democrats agree to the Trump administration, whereas most of them have taken it upon themselves to penalized high profiled firms at any given opportunity.

Focusing on the previous acquisitions by the social media company in 2012 and 2014 includes the photo-sharing app, Instagram and WhatsApp messenger. The acquisition is recorded to worth over $20 billion as its major dealings should have appreciated overtime.

However, the policy designed for tech companies is quite convinced that Facebook, as an entity, has habitually acquired several startup companies with the potential to put its social platform out of business.

Although the FTC initially approved the deals on monopolising Instagram and WhatsApp messenger as a single entity, Facebook. This fact gives the social media company something thoughtful to debate about in the courthouse. Still, the federal agency and the coalition of state regulators are bent on the dissolvent of such acquisition.

Among the States that collided with the Federal agency to sue Facebook and other high profiled tech companies, Alabama, South Carolina, Washington, D.C., South Dakota did not join the union in pursuit of suing high profiled tech companies.

Letitia James, the New York Attorney General representing the union of forty-six states, said that a company like Facebook usually acquires rivals at their startup stage before becoming a threat to its existence.

Letitia said: “for nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users.”

The Facebook General Counsel Jenifer Newstead has induced doubts regarding the alleged violations by the social media company – she said that the photo-sharing app, Instagram, and WhatsApp messenger had accomplished its level of success because of the investment Facebook issued that worth billions of dollars that helped groom the social platforms from their startup stage to its current level.

Newstead noted that its consumers are also beneficiaries of Facebook’s social platforms and their free services.

Facebook Chief Executive Mark Zuckerberg shared a post in its internal discussion platform – he said, “the lawsuit is one step in a process which could take years to play out its entirety.” Comments were turned off for all the posts related to the lawsuit. Jennifer Newstead also advised the group’s active members and employees not to post about the lawsuit case.

Mark Zuckerberg has been anticipating the legal challenge that intends to break up his company, and experts believe Facebook will yield to the federal agency’s demands because of the pejorative statement Zuckerberg made in 2008. He said, “it is better to acquire than to compete” – the email was gotten from Facebook’s documents.

Although, cases where a company is broken are very rare, and in this case, an acquisition that has existed for almost a decade can be difficult to dissolve even with legal process. Moreover, Facebook’s antitrust lawsuit is recorded as the second major lawsuit against a high profiled company in 2020.

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