At any point of the digital transition,…
Antitrust analysts said that the next fate of Facebook could be that it will either be compelled to break up in the face of two big antitrust lawsuits; either change its business and negotiate a deal with the prosecutor;
or the corporation itself may show that it emerged from the claims of the government’s case is false, and it eventually prevailed in court.
The US Federal Trade Commission (FTC) and a coalition of 48 state and tribal attorneys general filed two antitrust complaints against Facebook on Wednesday, local time asking the firm to divest its WhatsApp and Instagram.
The two cases allege that a “buy or bury” (acquisition or block) policy was introduced by Facebook to eliminate rivals and discourage the development of smaller competitors.
Winning the FTC and the States
In the two cases, the judge will decide that Facebook must break the Instagram photo-sharing service and WhatsApp messaging app if the government wins.
“Sam Weinstein, a professor at Yeshiva University’s Cardozo Law School in the United States, said In terms of the merits of the case, the lawsuit claims are very strong at first sight. The quest for a solution is nevertheless, very strong. Difficult, since a rare correction action is the spin-off. It is probably worthwhile, however to take this approach to this situation.
While it is very unusual to break a business for antitrust reasons, Weinstein said But I think this approach is reasonable and may even happen.” He noted that much of the hard facts simply comes from the content of the company’s own files this time against Facebook in the case. At this point, it is not the same as the antitrust lawsuit against Google by the US Department of Justice.
While a company’s anti-monopoly spin-offs are not popular, even small-scale spin-offs are not rare in such situations. BazaarVoice market review platform has acquired PowerReviews from rivals. The U.S. in 2014 BazaarVoice was sued by the Department of Justice, causing the two customer review sites to postpone the merger. The most prominent is that the US Department of Justice compelled ATT to spin off the telecommunications business in 1982.
The new government team of President-elect Joe Biden may support the two lawsuits against Facebook (Joe Biden). The media was unable to receive comments from the team, though.
This time, of the 5 judges of the FTC, 3 were in favour of the case against Facebook and 2 were against it. Two were Democrats, out of the three representatives who sponsored the prosecution.
Wins from Facebook
One challenge that the FTC is likely to face is that they were both checked and accepted by the FTC after Facebook bought Instagram and WhatsApp in 2012 and 2014. This is an argument that when it comes to lawsuits by the FTC, Facebook clearly stresses.
“It is very difficult to dissolve a perfect merger that has been in place for many years,” said Seth Bloom of the Bloom Strategic Counsel consultancy company. “To dissolve such a merger, the court will be very reluctant. .”
Furthermore the complaint alleges that Facebook needs app developers to stop interfering with Facebook on its website. But Bloom said the request from Facebook might be old, and it would probably be fixed quickly.
In fact, between 2011 and 2018, Facebook made the Facebook website, including some commercially relevant APIs, available to developers only when the requirements are met, according to the complaint. Yes, the developer’s application neither competes with Facebook, nor does it encourage the competition of Facebook’s rivals. The so-called criteria that fulfill the conditions apply to Yes.
A blog post published by Facebook claimed that these limitations are the industry norm in reaction to this change.
Jennifer Newstead (Jennifer Newstead), general counsel for Facebook, released a statement that corporations should select their own business partners to ensure that the company’s site is available to entrepreneurs without being used unlawfully.
Facebook claims it will win in court in reaction to this antitrust case from the FTC and separate states, as under code report yesterday.
Newstead said that in a highly competitive climate, Facebook would have to “operate.” She said, “We look forward to defending ourselves in court.” We hope the facts would illustrate that Facebook, Instagram and WhatsApp are collectively justified in rivalry.
Is the case going to be settled?
George Hay, an antitrust professor at the Cornell University School of Law, argues that Facebook has little reason to separate its Instagram and WhatsApp because there are no criminal charges in the case. Furthermore, he estimated that the case would take years to meet its final verdict.
“It will not be a clear winner,” he said while responding to claims in the government’s case. “Everything Facebook does is public, and it has been public for 15 years. For the government, they have never done it I have not consulted the team of antitrust lawyers on anything.”
There have been examples of agreements between the FTC and Facebook, though. Facebook decided last year to pay US$ 5 billion to negotiate a deal with the FTC, which stopped probing the company’s invasion of consumer privacy.