Facebook has been sued by the US Federal Trade Commission (FTC) and a bipartisan coalition of over 40 attorneys-general for allegedly stifling competition by buying up or cutting out competitors.
In two lawsuits, filed by the FTC[1] [PDF] and attorney-general coalition[2] [PDF], respectively, both accuse Facebook of buying up companies -- namely, Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014 -- to eliminate any competition that has the potential to erode the company's dominance.
The FTC said in its lawsuit that Facebook initially tried to compete with Instagram on the merits by improving its own offerings, but it ultimately chose to buy Instagram to neutralise the direct threat posed by Instagram and make it more difficult for another personal social networking competitor to gain scale.
The lawsuits also allege companies that rebuffed offers to be acquired by Facebook -- or those that posed a competitive threat -- would subsequently be cut off from access to various key components within the social networking giant's network.
According to the coalition's legal complaint, Facebook allegedly pursues an "open first-closed later approach" whereby its platform is open to third-party services unless they pose competitive threats to Facebook.
For third-party services that present such threats, Facebook would allegedly change its practices and policies to close APIs that are relied upon by those services, as well as take additional actions to degrade and suppress the quality of their interconnections with Facebook.
In light of these allegations, both the FTC and coalition of attorneys-general have called for Facebook to break off from Instagram and WhatsApp to "restore the competition that would exist" absent of the social networking giant's alleged monopolistic practices.
The FTC