United States (US) regulators on Thursday filed a new lawsuit accusing Facebook of maintaining an illegal monopoly in social networking, reviving the case two months after it was dismissed by a federal judge.
In the amended complaint, the Federal Trade Commission (FTC) said Facebook’s dominance “is protected by high barriers to entry”, and that “even an entrant with a superior product cannot succeed against the overwhelming network effects enjoyed by an incumbent personal social network”.
The lawsuit filed in federal court in the US capital said Facebook used “anti-competitive acquisitions” of potential rivals such as Instagram and WhatsApp to protect its dominance.
FTC officials said the deals amounted to “illegal buy-or-bury” schemes.
“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,” said Acting FTC Competition Bureau Chief Holly Vedova in a statement.
“This conduct is no less anticompetitive than if Facebook had bribed emerging app competitors not to compete.”
The lawsuit, which could take years to go through the courts without a settlement, calls for the court to order “divestiture of assets”, including WhatsApp and Instagram, to restore competition.
The lawsuit comes amid a rising “techlash” against the largest US tech firms, which dominate key economic sectors and have become stronger during the pandemic as more people turn to online services.
Facebook, which has long denied it maintains a monopoly, said in a statement, “We are reviewing the FTC’s amended complaint and will have more to say soon.”