The Federal Trade Commission (FTC) and an alliance of attorneys general from 48 states and territories filed a pair of stinging antitrust lawsuits on Wednesday against Facebook (NASDAQ:FB), asking that the company be broken up.
The government's case revolves around Facebook's acquisitions of Instagram and WhatsApp in 2012 and 2014, respectively. The lawsuit claims the tech giant bought rivals to eliminate competition. The filing also cites Facebook's attempts to acquire other popular platforms, including Twitter (NYSE:TWTR) and Snap's (NYSE:SNAP) Snapchat. The FTC is asking for a permanent injunction that could force the social media platform to divest Instagram and WhatsApp.
"Since toppling early rival Myspace and achieving monopoly power, Facebook has turned to playing defense through anticompetitive means," the FTC wrote in its lawsuit. "After identifying two significant competitive threats to its dominant position -- Instagram and WhatsApp -- Facebook moved to squelch those threats by buying the companies." The complaint went on to cite a 2008 email in which CEO Mark Zuckerberg allegedly said, "It is better to buy than compete."
The case brought by the states and territories focuses on the harm to consumers from Facebook's failure to protect user data, saying the company can "do as it pleases with users' data to serve its own business interests because users have no alternatives."
Facebook Vice President and General Counsel Jennifer Newstead fired back in a blog post on the company's website:
Both of these 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 ... Now, many years later ... the agency is saying it got it wrong and wants a do-over.
Newstead went on to accuse the FTC of "revisionist history," saying "this is simply not how the antitrust laws are supposed to work."