FTC sues Facebook and demands disengage from Instagram and WhatsApp

The U.S. FTC and 48 attorneys general filed a lawsuit for anti-competitive practices against Facebook. They request that Facebook roll back Instagram and WhatsApp acquisitions, among other measures.

On the other hand, Facebook has released an extensive statement setting out its arguments for responding to the FTC's accusations.

The FTC's indictment of Facebook

As can be read in the FTC's lawsuit, Facebook is accused of illegal and anti-competitive conduct after implementing a "systemic strategy" to neutralize any threat to its monopoly.

In this context, they seek to curb Facebook's behaviour and one of the measures proposed by the FTC is to unlink Instagram and WhatsApp:

The FTC is seeking a permanent court order in federal court that could, among other things: demand the sale of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anti-competitive conditions on software developers and require Facebook to request prior notification and approval for future mergers and acquisitions.

Facebook responds to FTC demand

Facebook released a long statement responding to the FTC's new demand. While it seems to mix some themes, one of its arguments is that the acquisitions of Instagram (2012) and WhatsApp (2014) have already been reviewed by regulators at the time and allowed the agreements to run their course.

On the other hand, they emphasize that the FTC has stayed out of the evolution of these two Facebook products and that in this period of time, Instagram has ceased to be the Instagram that Facebook acquired, and is now the result of the technology and investment of all these years. And the same dynamic applies to WhatsApp.

In this context, Facebook bases its argument on how inconsistent this FTC retroactive is with its new review request to cancel transactions that occurred years ago:

Besides being a revisionist story, this is simply not how antitrust laws are supposed to work. [...] Now, the agency has announced that no sale will be final, regardless of the resulting harm to consumers or the paralyzing effect of innovation.

This last point links to Facebook's defence that mentions that both Instagram and WhatsApp have evolved into better products for consumers. This is just beginning, so there will be many chapters in this new war between Facebook and the FTC.

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