In particular, the complaint alleges that Facebook’s leadership understood-and feared-that a successful mobile messaging app could enter the personal social networking market, either by adding new features or by spinning off a standalone personal social networking app. Facebook’s acquisition of Instagram for $1 billion in April 2012 allegedly both neutralizes the direct threat posed by Instagram and makes it more difficult for another personal social networking competitor to gain scale.Īround the same time, according to the complaint, Facebook perceived that “over-the-top” mobile messaging apps also presented a serious threat to Facebook’s monopoly power. The complaint alleges that Facebook initially tried to compete with Instagram on the merits by improving its own offerings, but Facebook ultimately chose to buy Instagram rather than compete with it. The complaint alleges that Facebook executives, including CEO Mark Zuckerberg, quickly recognized that Instagram was a vibrant and innovative personal social network and an existential threat to Facebook’s monopoly power. Instagram, a rapidly growing startup, emerged at a critical time in personal social networking competition, when users of personal social networking services were migrating from desktop computers to smartphones, and when consumers were increasingly embracing photo-sharing. Last year alone, Facebook generated revenues of more than $70 billion and profits of more than $18.5 billion.Īccording to the FTC’s complaint, Facebook targeted potential competitive threats to its dominance. This unmatched position has provided Facebook with staggering profits. Statement by Ian Conner, Director of the Bureau of CompetitionĪccording to the FTC’s complaint, Facebook is the world’s dominant personal social networking service and has monopoly power in a market for personal social networking services. Video by Ian Conner, Director of the Bureau of Competition Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.” “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. “Personal social networking is central to the lives of millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition. The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp prohibit Facebook from imposing anticompetitive conditions on software developers and require Facebook to seek prior notice and approval for future mergers and acquisitions. This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition. Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategy-including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers-to eliminate threats to its monopoly. The Federal Trade Commission today sued Facebook, alleging that the company is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct. About the FTC Show/hide About the FTC menu items. News and Events Show/hide News and Events menu items.
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