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Facebook is battling yet another lawsuit brought by a few competitors. The plaintiffs want to reduce Facebook’s dominance via selling its WhatsApp and Instagram assets.
Facebook is facing a lawsuit from a group of four plaintiffs who are accusing the social media giant of anti-competitive moves. The complainants are demanding a court order that will force the company to shed some of its weight and sell its assets.
The Facebook Lawsuit
On Thursday, four tech startups initiated the lawsuit. In the filing, the plaintiffs suggest Facebook’s unlawful moves have built what they describe as a “social data barrier to entry.” This continues to prevent them from being able to pull the weight required to be worthy competition for the company.
“This action seeks to halt the most brazen, willful anticompetitive scheme in a generation – a scheme that verges on final, irreparable completion as of the date of this Complaint. Facebook stands today as a paragon of unbridled market power.”
The complainants want to end Facebook’s monopoly in the sector. They want the Court to force Facebook to reduce its dominance by selling off assets like Instagram and Whatsapp. The filing warns that if this is not done, Facebook will merge all of its parts and achieve “unrivalled global dominance of the Social Data and Social Advertising Markets.” The lawsuit, according to them, is “to halt the most brazen, willful anticompetitive scheme in a generation.”
The complainants include lending and financial services platform Lenddol, online marketplace Cir.cl Inc, identity verification platform Beehive Biometric Inc., and Reveal Chat HoldCo LLC.
In a statement on Thursday as well, Facebook responded to the suit. Through a spokesperson, the company dismissed the claims from the complainants, suggesting that they are baseless. Basically, Facebook believes that this is a cash-grab scheme and should be ignored.
“We operate in a competitive environment where people and advertisers have many choices. In the current environment, where plaintiffs’ attorneys see financial opportunities, claims like this aren’t unexpected but they are without merit.”
Scrutiny in the Tech Space
For a while now, the popular tech giants have been having quite a rough time with different regulatory authorities. For example, both the Federal Trade Commission (FTC) and the Justice Department have begun investigations against Facebook.
The FTC is considering requesting a preliminary injunction against the tech giant. The Commission also believes that Facebook is a little too anti-competitive in its desire to merge all of its apps. The FTC wants the injunction to prevent this merger.
Also, there is the possibility, however slight, that authorities could force a Facebook split (outside of the above lawsuit.) However, if the injunction is unsuccessful and Facebook completes its integration, splitting the company might be near impossible.
In September, Snapchat parent company Snap revealed that it has a dossier with details of Facebook’s illicit moves. Dubbed Project Voldemort after the Harry Potter series’ villain, the document contains unlawful actions Facebook took to stifle Snap’s growth.