Facebook

In revived suit, US FTC says Facebook ‘bought or buried’ rivals to crush competition

Victor Barreiro Jr.
In revived suit, US FTC says Facebook ‘bought or buried’  rivals to crush competition

FACEBOOK. A 3D-printed Facebook logo is seen placed on a keyboard in this illustration taken March 25, 2020

Dado Ruvic/Reuters

The US Federal Trade Commission says Facebook illegally bought competitors or stifled competition through policy changes. Facebook calls the suit 'meritless.'

The US Federal Trade Commission (FTC) revived an antitrust lawsuit against Facebook on Thursday, August 19, providing more details and alleging Facebook violated antitrust laws by eliminating competition through a “buy-or-bury scheme.”

The refiling follows a June 28 court ruling on the FTC’s earlier complaint asking the US District Court for the District of Columbia to force Facebook to sell off WhatsApp and Instagram. That ruling found the FTC failed to show that Facebook had monopoly power in the social-networking market, and also outlined other problems.

The amended complaint, meanwhile, includes additional data and evidence to support the FTC’s stand that Facebook worked to secure a monopoly in the social media space.

The now-80-page complaint argues Facebook’s dominance in the social media space, as the company’s monthly active users in its apps “providing personal social networking services in the United States has exceeded 65% since 2012 and was at least as high in 2011.”

It added Facebook got app developers on board by sharing its application programming interfaces (APIs) and tools for interconnection with Facebook. The policy, the FTC said, boosted developer and user engagement, and fueled Facebook advertising profits.

When Facebook started to see the same developers as a threat which “could aid emerging rivals or even challenge Facebook directly,” the company tweaked its API policies into a weapon to stifle competition.

The FTC said developers could only access Facebook’s platform if they agreed to not compete with Facebook’s core services and did not facilitate the growth of possible Facebook rivals.

Holly Vedova, FTC Bureau of Competition acting director, said, “Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat.”

Vedova added, “Facebook’s actions have suppressed innovation and product quality improvements. And they have degraded the social network experience, subjecting users to lower levels of privacy and data protections and more intrusive ads. The FTC’s action today seeks to put an end to this illegal activity and restore competition for the benefit of Americans and honest businesses alike.”

A Reuters report meanwhile said Facebook will continue to fight the lawsuit, calling it “meritless.”

“Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful,” a Facebook spokesman said.

A public version of the complaint is available to download and view here. An FTC press release on the amendment can be found here.Rappler.com

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Victor Barreiro Jr.

Victor Barreiro Jr is part of Rappler's Central Desk. An avid patron of role-playing games and science fiction and fantasy shows, he also yearns to do good in the world, and hopes his work with Rappler helps to increase the good that's out there.