Facebook, the social media giant company, appeals to the federal judge for a dismissal of antitrust suits. The company has been sued for antitrust by Federal Trade Commission (FTC) and state attorneys.
Facebook is appealing to the federal judge for dismissal of antitrust suits as having no valid basis. The company has been accused of manipulating and suppressing competition. The company feels that the FTC has been discounting the dynamics within the competitive high-tech industry. And insists that it has not harmed any competitor or consumers.
The two largest acquisitions led to Antitrust Suits
The lawsuit was being filed by the Federal Trade Commission (FTC) last December. A group of around 48 attorneys general accused Facebook of illegally monopolizing the industry for years after months of investigations. The basis for such accusation was when Facebook acquired the two other giant social media platforms: Instagram and WhatsApp.
The FTC believes that the 2 large acquisitions were intended to remove potential rivals. With both Instagram and WhatsApp who have huge and active subscribers, they will become obstacles in Facebook’s growth path. Investigators commented that Facebook is scooping up small but potential rivals who might become future threats.
Last 2012, Facebook acquired Instagram for $1 billion. And in the 2014 acquisition, WhatsApp was priced at $19 billion. Both deals were not hindered legally by any regulatory agencies.
Aside from removing potential competitors, the suit also alleges Facebook for earning a huge amount of money through its advertisements. This leaves users with few social media options. Facebook asserts that their users were not coerced to use its platform, rather they have the prerogative to use it or not. Its users choose to use its platform because they like it and because they found it helpful to them. Facebook can be downloaded free on any smartphone or iPhone.
Antitrust laws are meant to promote healthy competition and protect consumers
The Antitrust laws are instituted to promote competition and protect end-consumers. And Facebook insists that the FTC has no hard evidence over the company violating any of the two. The social media giant argues that if the two largest acquisitions were illegal. Then, why were they not advised that it is so during the process of acquisitions?
In over 16 years of operation, Facebook acknowledges the lawsuit to be the most significant legal threat to the company. This reflects the inconsistency of the government’s attitude towards Facebook and its fellow tech companies. The chief executives from Facebook, Google, Apple, and Amazon were summoned for investigations before Congress last summer. Grilling the companies over the antitrust issues. And another hearing has been scheduled for later this month.
These giant tech companies have been grilled for the alleged violation of consumer privacy and monopolizing by shutting out competitors. Allegedly, the giant companies get rid of the competition by acquiring and controlling competitors and other major business lines.
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