Will 'Aljja' Instagram Be Forced to Sell? US Files Antitrust Lawsuit Against Facebook (Update)

US Antitrust Authorities Claim "Facebook Reduces Competitors Through Mergers"
Government Victory Could Lead to Instagram and WhatsApp Separation
"Strong Commitment to Antitrust" ... Online Platform Conflicts Intensify

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. government has filed an antitrust lawsuit against the giant social networking service (SNS) company Facebook. Facebook is now facing the possibility of being forced to sell Instagram and WhatsApp, which are called the "golden geese."

[Image source=AP Yonhap News]

Local media including The Wall Street Journal (WSJ) reported on the 9th (local time) that the U.S. Federal Trade Commission (FTC) and 46 states have filed an antitrust complaint against Facebook in the U.S. District Court in Washington, D.C.

In the complaint, the FTC pointed out that Facebook acquired companies that were seen as threats to its business in order to maintain its monopolistic market position, calling it an unfair practice that hindered competition. The FTC cited a statement by Facebook CEO Mark Zuckerberg in 2008, saying, "Just buy the competitors," as evidence. This showed an intention to preemptively block new competitors from entering the market.

Over the past 15 years, Facebook has grown into an IT giant by acquiring 70 companies including the photo-sharing application Instagram and the messenger service WhatsApp. After MySpace, which competed in the early days of the startup, fell behind, Facebook has enjoyed a virtually unrivaled position in the SNS industry.

Ian Conner, Director of the FTC's Competition Bureau, said, "Personal SNS is at the center of the lives of millions of Americans," adding, "Facebook's actions to maintain and solidify its monopolistic position hinder consumers from benefiting from competition."

This lawsuit is drawing attention as it demonstrates the U.S. government's determination to break the monopolistic positions of giant IT companies. WSJ evaluated, "The lawsuit was filed just weeks after the Department of Justice filed an antitrust lawsuit targeting Google's search engine," and said, "It reflects America's concerns about the dominance of online platforms."

If the U.S. government wins this lawsuit, Instagram or WhatsApp are likely to be separated from Facebook. WSJ also predicted that this lawsuit could lead to the sale of Instagram or WhatsApp.

Instagram, which Facebook acquired for $1 billion in 2012, has rapidly emerged as an important asset accounting for a significant portion of Facebook's corporate value. If Instagram is separated, Facebook's corporate value could sharply decline. Currently, 196 million people in the U.S. and Canada, and 2.5 billion people worldwide use the Facebook app daily. WSJ described this as "Facebook's greatest crisis in 16 years since it grew from a college startup to a social media giant."

Facebook expressed dissatisfaction with the FTC's lawsuit filing. The company stated, "The FTC approved the acquisitions of Instagram and WhatsApp," and added, "Now, years later, they want to reverse that decision." Jennifer Newstead, Facebook's Vice President, said, "The government is once again sending a cold warning to American businesses," and argued, "Individuals and small businesses use Facebook's services and ads not because they are free, but because our apps and services provide the greatest value."

Earlier, CEO Zuckerberg also defended himself by mentioning the rise of new competitors like TikTok, saying, "We do not have a monopolistic position." The antitrust lawsuit against Facebook following Google is expected to spread to other companies. WSJ reported that conflicts between authorities and companies over online platform monopolies have intensified. Amazon and Apple cannot feel at ease either.

However, since it is a period of U.S. administration transition, the situation could change once President-elect Joe Biden takes office. The New York Times (NYT) noted that there have been almost no cases where antitrust lawsuits were filed against previously approved mergers and acquisitions (M&A), reminding that Facebook's acquisitions such as Instagram were approved during the Barack Obama administration. The Biden transition team has not shown any particular response to this lawsuit.

This content was produced with the assistance of AI translation services.