(Reuters) – A US lawsuit that could lead to the dissolution of Facebook Inc.'s social media empire could be hampered by the government's role in the company's monopoly building, and a new shortage of similar cases, legal experts said.
In twin lawsuits on Wednesday, the Federal Trade Commission and 48 U.S. states and territories claimed Facebook's purchases of media sharing apps Instagram 2012 and WhatsApp 2014 were part of an illegal pattern of maintaining their monopoly on social networks, leaving consumers few alternatives to Silicon apps The Valley Giant.
But the FTC reviewed the two offers at the time, specifically examining the Instagram deal and did not try to block them. Facebook has already used this fact to call the lawsuits "revisionist history" and will continue to do so as part of its defense, said a person familiar with the company's thinking.
Many of the company's emails and other evidence that the FTC revealed in its complaint on Wednesday ̵
The source described the FTC's attempts to redo now as never before seen and noted that rivals including TikTok, Snapchat and Twitter have continued to grow over the past eight years.
Legal researchers or lawyers who were not involved in the case said that the FTC's inaction almost eight years ago is problematic but not insurmountable.
"They were wrong not to challenge it first but it's water under the pond," 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 concludes that it has "" significantly reduced competition.
In fact, companies have been sued long after the deal was completed. In 1964, the Ministry of Justice succeeded in forcing the chemical giant du Pont to sell a stake in carmaker General Motors in a case brought about 30
The FTC seems to understand the optics of the situation, says Joel Mitnick, an antitrust attorney at Cadwalader, Wickersham & Taft, while the states claim that each of the two Facebook acquisitions violated U.S. law prohibiting unfair mergers. sued the FTC only under a separate law that largely blocks systems that allow companies to unfairly hold on to power.
”(FTC) obviously not I want not that the judge should focus on whether they blew it up at the time of the acquisitions, Mitnick said. "The FTC has to say to the court, 'We just did not understand at the time that these mergers would create companies that would increase in size and consumers would not go to other websites. ""
The FTC declined to comment on its legal strategy.
Even if the FTC has precedence if Facebook breaks the law, a split would be far from certain.
The charter that the FTC draws up its last triggered a major divestment. 2000 when a federal judge ordered Microsoft to separate its operating systems and apps. But an appeals court later overturned the decision, a decision that is likely to benefit Facebook, Mitnick said.
The FTC can oppose a 1966 Supreme Court ruling that a conglomerate developing plumbing supplies and burglary systems had to dissolve the series of bonds that led to its market power.
The FTC's work will be more difficult because "the government has not conducted such a divestiture in a while," said Rory Van Loo, an associate professor of law at Boston University. But there is perhaps no better cure in this case, and "the great divestments of decades and even a century ago are still good law," he said.