(Reuters) – A U.S. lawsuit that could lead to the break-up of Facebook Inc’s social media empire may be hindered by the government’s role in the company’s monopoly building, and a recent dearth of similar cases, legal experts said.
In twin lawsuits on Wednesday, the Federal Trade Commission and 48 U.S. states and territories alleged Facebook’s purchases of media-sharing apps Instagram in 2012 and WhatsApp in 2014 were part of an illegal pattern to maintain its monopoly in social networking, leaving consumers with few alternatives to apps from the Silicon Valley giant.
But the FTC reviewed the two deals at the time, especially scrutinizing the Instagram deal, and did not try to block them. Facebook has already used that fact to call the lawsuits “revisionist history” and will continue to make that a part of its defense, a person familiar with the company’s thinking said.
Many of the company emails and other evidence the FTC revealed in its complaint on Wednesday – which show Facebook was motivated to eliminate costly competition – could have been accessed back then under its investigative powers.
The source described the FTC’s attempted redo now as unprecedented and noted that rivals including TikTok, Snapchat and Twitter have continued to grow over the last eight years.
Legal scholars or attorneys not involved in the case said the FTC’s inaction nearly eight years ago is problematic, but not insurmountable.
“They were wrong not to challenge it at first but that’s water under the dam,” said Spencer Waller, director of the Institute for Consumer Antitrust Studies at Loyola University Chicago. “Now, they can say, ‘We’ve seen what happened and conclude it has’” substantially lessened competition.
