In a bold move, US antitrust watchdogs have sued Facebook, arguing thesocial media giant needs to be broken up. Momentum is on the regulators’side, experts say.
Backed by attorneys general from 48 US states and districts, the US FederalTrade Commission (FTC) on Wednesday argued that social media corporationFacebook had harmed consumer choicelinkanduser data privacy with its unfair business practices. At the center of theconflict are questions surrounding the tech giant’s motivations foracquiring photo-sharing platform Instagram in 2012 and messaging appWhatsApp in 2014.
The FTC argues that Facebook acquired the two apps in an effort to maintainits market dominance. For this reason, the company should be broken up.
Losing Instagram and WhatsApp would raise serious questions aboutFacebook’s long-term viability. The popular apps were meant to play asignificant role in the future of Facebook, whose use has plateaued inrecent years.
Challenging Facebook before a federal court will be a serious undertaking,especially considering regulators reviewed the deals at the time andallowed them to go through. But the move is not without precedent, andexperts believe the lawsuits have legs.The original social ‘network’
Facebook could find itself dismantled just like US telecommunicationscompany AT&T was in the early 1980s, North Carolina Attorney General JoshStein, one of the attorneys-general involved in the investigation, said ina statement.
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Founded in the late 19th century, AT&T (American Telephone & TelegraphCompany) flourished during the 20th century into a network of subsidiarycommunication companies scattered around North America . Atelecommunications monopoly known as the Bell System emerged, named afterthe company’s founder, the man credited with inventing the telephone,Alexander Graham Bell.
Antitrust regulators repeatedly went after the company for abusing itsmonopoly status. Finally, in 1982, facing the prospect of finally losing incourt, AT&T agreed to break into seven smaller companies, many of whichstill operate today.
Microsoft nearly met a similar fate in the 1990s when a court ordered thetech company to split up its software and operating systems units into twoentities. The firm dodged that fate with a financial settlement, but neverquite recoveredlink fromthe setback.
