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Explainer: The New US Lawsuits Against Facebook
The U.S. government and several U.S. states have brought new lawsuits against Facebook. The cases accuse the company of abusing its market power in social networking to destroy smaller competitors. The accusers are seeking a judgment that could include forcing the company to sell off its Instagram and WhatsApp services.
Here are some answers to the main questions about the case:
What are the allegations?
One of the allegations against Facebook is that it purposefully seeks to buy possible competitors, often at a high price, before the companies have had a chance to grow. For example, Facebook bought Instagram in 2012, when it had no profits and only a few employees but a large number of users.
In 2013, the company bought Onavo. Facebook said the company’s services included a tool to help protect user data from third parties. But the social media service also used Onavo to collect data on mobile apps favored by Facebook users. The lawsuits allege that Onavo used this information to identify other takeover targets. One of those targets was WhatsApp, which Facebook bought in 2014.
The U.S. Federal Trade Commission (FTC) also accuses Facebook of persuading small, new companies to join its network in order to make Facebook more likeable to users. But it required those companies not to compete with Facebook itself or the Facebook Messenger service.
What did the FTC request?
The FTC has wide powers in its legal requests. The agency asked the judge to force Facebook to sell assets, possibly including Instagram and WhatsApp.
It also asked the judge to order Facebook to stop requiring small companies on its website not to compete with its services.
How did Facebook react?
Facebook said it is reviewing the FTC and state anti-competition cases.
In a statement, the company said the government “now wants a do-over” after permitting its takeover of Instagram and WhatsApp years ago. It said the government has no respect for the effect that would have on the business community or “the people who choose our products every day.”
How long would a trial take?
Legal experts say pre-trial hearings in the case and possible trials themselves would likely last a year or more. A decision could come months after that.
Are the allegations political?
President Donald Trump’s administration has expressed anger against several technology companies for allegedly silencing conservatives. Many Republican lawmakers have also brought up the issue of unfairness during recent anti-competition hearings.
Facebook notably conflicted with the administration when it added warnings to some of Trump’s posts. Some of the warnings were related to unproven claims by Trump that the 2020 presidential election was not fair.
The Facebook lawsuits follow a major case brought against Google in October by the U.S. Department of Justice. In that case, the government accuses Google of abusing its dominance in the online search and advertising markets.
I’m Alice Bryant.
This story contains content from Reuters and AP reports. Alice Bryant adapted them for Learning English. Bryan Lynn was the editor.
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Words in This Story
lawsuit – n. a process by which a court of law makes a decision to end a disagreement between people or organizations
allegation – n. a statement saying that someone has done something wrong or illegal
app – n. a computer program that performs a special function
asset – n. something that is owned by a person or company
post – n. a message put on social media
dominance – n. the act of being more important, powerful, or successful than most or all others