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The US Government Says Facebook Needs To Sell Instagram And WhatsApp

Forty-eight attorneys general and the Federal Trade Commission filed suit against the company Wednesday.

Facebook has used illegal monopoly power and an “unlawful scheme” to stifle competition, degrade personal privacy, and crush rivals, according to antitrust lawsuits filed Wednesday by the Federal Trade Commission and attorneys general from 46 states and two territories.

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” New York Attorney General Letitia James said at a press conference announcing the action. “By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived as potential threats.”

In a statement, Jennifer Newstead, Facebook’s vice president and general counsel, called the lawsuits’ allegations “revisionist history.”

“Instagram and WhatsApp became the incredible products they are today because Facebook invested billions of dollars, and years of innovation and expertise, to develop new features and better experiences for the millions who enjoy those products,” she said. “The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago. The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”

Facebook previously defended its actions and acquisitions after the House Antitrust Subcommittee released a report in October that said it and other tech giants have abused their monopoly power.

During public hearings, the subcommittee released emails from Facebook founder and CEO Mark Zuckerberg in which he told a company executive that acquiring Instagram would neutralize a competitor.

“These businesses are nascent but the networks are established, the brands are already meaningful, and if they grow to a large scale they could be very disruptive to us,” Zuckerberg wrote to David Ebersman, then the company’s CFO, in early 2012.

Forty-five minutes after sending his email, Zuckerberg attempted to walk back his comments. “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,” he wrote in a follow-up message.

On Wednesday, news of the antitrust lawsuits filtered to employees via articles posted by their colleagues to the company’s internal message board. It took several hours after the news broke for Newstead and Zuckerberg to make internal announcements, with Facebook’s CEO saying he was “limited in discussing specifics of these cases.”

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