Federal Government Files New Facebook Lawsuit Alleging Major Crimes
In the past few years, there have been several potential issues with the way Facebook has operated. The site has gradually evolved from a small social media company to a major business that affects everyday life for millions. Previous attempts to control Facebook have often failed, with the court recently striking down a Federal Trade Commission complaint against Facebook. However, yesterday, the FTC has started a new attempt to break Facebook's potential monopoly.
Previous Antitrust Lawsuit Struck Down Due to Lack of Evidence
At the heart of all the debate is whether or not Facebook is a monopoly. Critics claim that the site buys up all its competitors and uses restrictions to keep app developers from creating any threatening new apps. Due to these concerns, the FTC sued Facebook in December of 2020.
Along with 48 state attorneys generals, the FTC alleged that Facebook was using its size and influence to unfairly restrict competitors. However, in June, U.S. District Judge James E. Boasberg decided to dismiss the case. The court explained that that lawsuit used too many broad generalizations and not enough specific proof to argue their claims. However, the lawsuit was dismissed without prejudice, which means the same case can be brought before the court again.
FTC Files Amended Complaint to Try Again
This week, the FTC has decided to take another shot at bringing Facebook down. The overall argument from the general lawsuit is still present. The FTC points out how Facebook has purchased Instagram, Whatsapp, and other competitors in an attempt to gain more influence in the social media market. They claim that Facebook has violated federal antitrust rules and ask that the monopoly be broken up.
However, the FTC has amended their formal complaint for their second try. They have now included 80 more pages of information. The FTC hopes that this proof will help to show their case does have merit. The new complaint includes more details on how Facebook unethically acquired competitors and restricted the development of new social media companies.
Facebook Responds to the Complaint
As soon as the FTC complaint was filed, Facebook was ready with a response. So far, the social media firm has been very proactive in managing public perceptions of the case. Instead of going with a "no comment" response, they have instantly created press releases on the subject. In the statement, Facebook characterizes the FTC complaint as a "meritless lawsuit" without any proof that Facebook is a monopoly.
They point to the fact that the case has already been thrown out of court before. Facebook maintains that the new information does not provide any further proof they are a monopoly. Furthermore, they point out that the FTC was the one to approve Facebook's purchases of WhatsApp and Instagram in the first place. Facebook describes the lawsuit as an attempt to rewrite current antitrust laws and undo sales that were finalized years ago.
Lawsuit Could Have Major Consequences for the Social Media Giant
Unlike personal injury lawsuits, the goal of an FTC lawsuit is not to get money. Instead, this sort of lawsuit asks that Facebook follow certain regulations if they lose the suit. The FTC's main focus will be trying to get Facebook to follow their interpretation of antitrust laws.
According to the lawsuit, the FTC asks that Facebook take measures to restore competition to the social media industry. This is a fairly broad idea, but they further specify that Facebook needs to divest their businesses and reconstruct their company. Ultimately, if Facebook loses the lawsuit, they would need to take subsidiaries like WhatsApp and Instagram and turn those companies into their own separate business.
If Facebook does have to do this, it could be risky for their business. They can still make money from their sales of the companies, but they could lose their ability to hold most of the social media market. The potential for more competitors could make it harder for Facebook to maintain the massive amount of revenue they currently get from advertisers and other means. Furthermore, this lawsuit is just one of the many legal battles Facebook is currently dealing with. They are currently dealing with an uphill battle, as their once positive reputation starts to decline.
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