The US Federal Trade Commission (FTC) has launched a new “antitrust suit” against Facebook, claiming that the social media giants are buying out companies they view as serious threats in order to retain their dominance in the social media market.
The new complaint was filed on Thursday afternoon by the FTC, who claim that Facebook has been using “underhanded and monopolistic business practices” in order to remain dominant in the market.
The complaint argues that Facebook needs to let go of previously acquired assets, such as Instagram and WhatsApp, in order to “restore competition.”
In June, the FTC had their original complaint against Facebook thrown out by the courts, after they could not present any conclusive evidence to prove that Facebook is a monopolistic company.
The new complaint
The basis of the new FTC complaint alleges that Facebook “illegally bought and buried potential threats to crush competition after a string of failed attempts to innovate.”
The claim states that the company “lacks the talent” to compete in the current market, so to remain on top, they buy out any companies they see as a potential threat.
Holly Vedova, the acting head of the FTC’s Bureau of Competition, stated that Facebook has failed to compete with new competitors in the market, before claiming that the tech giants also “suppress innovation and the improvement of quality products.”
She also slammed Facebook’s use of “lower levels of privacy and data protection” accusing the company of subjecting its users to a “degraded social network experience.”
The new complaint, which stands at 80 pages long whereas the original was only 53, points to a business strategy document created by Facebook founder and CEO Mark Zuckerberg in 2008, which outlines the company’s intentions to buy out competitors as “it is better to buy than to compete.”
The FTC has used this document to support their argument that Facebook tracked the rise of potential threats in the market, and used this data to determine the acquisition of new assets.
The original complaint launched by the FTC was thrown out by in federal court back in June after Judge James Boasberg ruled that the regulator could not prove that Facebook was operating under the usage of “monopoly power.”
He stated that it was his belief that the FTC expected the court to simply agree to their arguments without substantial proof.
He did, however, give the FTC another chance to argue the case, giving them the deadline of last Thursday to do so.
The tech giants haven’t stayed quiet throughout this process, releasing a statement after the FTC unveiled their new case.
In the statement, the company argues that the FTC case is “meritless,” all whilst citing the original complaint that failed against them, arguing that there was no evidence to prove Facebook to be a monopolist company, and that remained the same.
They defended their acquisitions of Instagram and WhatsApp, stating that both buyouts of the competitors were “reviewed and cleared years ago.”
The company then went on to accuse the FTC of attempting to “rewrite antitrust laws,” before claiming that they were trying to tell the business community that “no sale is ever final.”
Facebook now have until October 4th to present their defense against the FTC’s new complaint.