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Facebook Feels Scrutiny of FTC and States in Monopoly Lawsuit
The Federal Trade Commission (FTC) and 48 states have filed a lawsuit alleging that Facebook has created an illegal social-networking monopoly by squeezing out potential rivals. Buying competitors such as Instagram and Whats App created what the FTC called a "monopoly presence" in the market. Facebook CEO Mark Zuckerberg and others in the organization have been quoted expressing the desire to buy rivals to neutralize them. The FTC claims that Mr. Zuckerberg said in an email, "It is better to buy than compete."
There is a belief among members of Congress that if Facebook has broken the law, it must be broken up into separate companies. Facebook has been perceived as a threat due to its control over questionable content and social media's impact on popular discourse. A monopoly relates to a market structure where a single company has major control and faces limited competition. State lawsuits allege that Facebook engaged in buying competitors such as FriendFeed, created unfair rules for third-party apps, and even prevented some of them from interfacing with Facebook. Our economic system is based on the foundation of fair competition. If Facebook gains too much power over social media platforms, they will have control of pricing and content.
On the other hand, Facebook claims they will defend their business model and that their acquisitions were approved by the FTC. Facebook has experienced other political challenges following disclosures of privacy violations. It may take a few years to know if the FTC lawsuit against Facebook will be successful.
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