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Facebook Hit With Antitrust Lawsuits From FTC And States Seeking To Divest Instagram And WhatsApp

The U.S. Federal Trade Commission is seeking a permanent injunction in federal court that could require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anti-competitive conditions on software developers.

The FTC sued Facebook, alleging that the company is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct.

The FTC said, following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, that the complaint alleged 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.

Responding to the antitrust lawsuits, Facebook said no American antitrust enforcer has ever brought a case like this before, and for good reason.

Facebook said that the Federal Trade Commission and state attorneys general today attack two acquisitions that it made: Instagram in 2012 and WhatsApp in 2014.

According to Facebook, both of those acquisitions were reviewed by relevant antitrust regulators at the time. The FTC conducted an in-depth "Second Request" of the Instagram transaction in 2012 before voting unanimously to clear it.

The European Commission reviewed the WhatsApp transaction in 2014 and found no risk of harm to competition in any potential market. Regulators correctly allowed those 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, Facebook said in a statement.

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