It was 2012 when Facebook bought Instagram for just $ 715 million, a popular photo sharing app. Two years later, he also “swallowed” the WhatsApp service. He has already paid $ 22 billion for it.
The US antitrust authorities did not respond to the transactions. However, Facebook boss and co-founder Mark Zuckerberg has become a hegemon among social media operators and is today the fifth richest person in the world. Its net worth is estimated at $ 100.5 billion, or about 2.18 trillion crowns.
However, the FTC and prosecutors now claim that Facebook has abused its monopoly power to illegally crush smaller rivals. The company reportedly strategically bought potentially competitive services and prevented Facebook from communicating with other applications. She violated the so-called Sherman Act, one of the oldest antitrust directives in the United States. Facebook’s stock price fell sharply by almost two percent last week in response to the news, but returned to growth on Monday.
Action based on e-mail
The indictment works, among other things, with a leaked e-mail from 2008, in which Zuckerberg literally states “it is better to buy than to compete”. Other facts that the lawsuit managed to collect are similar. For example, in 2014, Facebook employees were to celebrate the takeover of WhatsApp by declaring that the company had bought the only rival that had the potential to grow into a second Facebook.
“Despite the above, the dispute will be very demanding, the plaintiff will have to prove that consumers have been harmed by these acquisitions,” explains Michal Petr, head of the Department of International and European Law at Palacky University in Olomouc. According to him, the situation in court will be complicated by the fact that the FTC has not contradicted both transactions in the past.
Moreover, the plaintiff is not only concerned with the imposition of a fine, but above all with the division of Facebook, ie the resale of WhatsApp and Instagram. “The courts have agreed to a similar requirement in only a few cases, moreover, the question is to what extent fully technologically integrated services can be divided today,” says Petr. “The lawsuit has hope of success, but the proceedings will be very controversial and will take years. After all, only three out of five FTC commissioners voted to file a lawsuit, ”he concludes.
In the footsteps of Rockefeller
Many foreign legal experts agree with Peter’s opinion. “I don’t think anything will happen in the near future,” said George Hay of Cornell University in Ithaca. By contrast, Jonathan Compton, a competition law specialist at DMH Stallard in London, sees current lawsuits as the biggest threat to large technology companies to date.
“I will not rest until the courts order Facebook to sell WhatsApp and Instagram, which the social network operator obtained illegally,” the main prosecutor in the case of Letitia James from New York said on Thursday.