Business Maverick: Facebook Risks Instagram-WhatsApp Breakup in Antitrust Case

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Facebook Inc. was sued by U.S. antitrust officials and a coalition of states that want to break up the company by unwinding its acquisitions of Instagram and WhatsApp, deals the government says were part of a campaign to illegally crush competition.

President-elect Joe Biden’s Justice Department to carry the Google case forward, while the Facebook case will fall to whomever Biden picks as FTC chairman if Joe Simons, who was appointed by Trump, leaves the agency. Simons, a Republican, voted with the agency’s two Democrats to approve the Facebook complaint. The other two Republicans voted against it.

Chief Executive Officer Mark Zuckerberg knew that by buying Instagram, Facebook “would not only squelch the direct threat that Instagram posed, but also significantly hinder another firm from using photo-sharing on mobile phones to gain popularity as a provider of personal social networking.” WhatsApp’s position as a global service without ties or restrictions to work with any single platform made it an attractive acquisition, the FTC found.

“The two most utilized strategies have been to acquire smaller rivals and potential rivals before they could threaten Facebook’s dominance and to suffocate and squash third-party developers that Facebook invited to utilize its platform,” James’s office said in a statement.

 

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