Facebook faces antitrust lawsuits for Privacy invasion of Instagram users and Illegal Monopolization from the FTC
Facebook Inc. is undergoing a legal battle as it is currently facing a case brought up by a private individual, and several other lawsuits from about 48 different attorneys, coming in from different states in the US, as well as another from the Federal Trade Commission (FTC).
In the first case, Conditi v. Instagram, a complaint filed by an affected Instagram user, Brittany Conditi at a Federal court in San Francisco, accused Facebook of allegedly spying on Instagram users through the unauthorized use of their phone cameras, which remained unseen by the users.
These complaints stem from media reports as far back as in July which stated that Instagram had gained access to iPhone cameras.
Responding to the allegations, Facebook refuted the reports, stating that it was a bug which caused false notifications of camera access to reflect on the iPhones. Facebook further said the bug was being corrected, so there was no cause for alarm.
The appellant however further argued that the app’s unsolicited use of the camera is intentional and done for the purpose of collecting “lucrative and valuable data on its users that it would not otherwise have access to.”
By “obtaining extremely private and intimate personal data on their users, including in the privacy of their own homes,” Instagram and Facebook are able to collect “valuable insights and market research,” according to the complaint.
To this allegation, Facebook however had gave no reply.
In another suit filed as far back as August, Facebook was similarly accused of using facial-recognition technology to illegally obtain biometric data of its more than 100 million Instagram users but Facebook again denied the allegations, stating that Instagram doesn’t require face recognition technology.
On the other hand, New York Attorney General, Letitia James announced a massive antitrust lawsuit against Facebook, with claims that the pioneer social media platform has posed a threat to competition by buying up smaller companies like Instagram and WhatsApp to squash the threat they posed to its business. Forty-seven other state and regional attorneys general are joining the suit.
The lawsuit targets Facebook’s acquisitions, particularly its $1 billion purchase of Instagram in 2011. In addition to its acquisition strategy, it is also alleged that Facebook used the power and reach of its platform to stifle user growth for competing services.
For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” the Attorney General said in a press conference today. “Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance.”
The Federal Trade Commission (FTC) also announced a suit against Facebook on similar grounds, at the same time as the states’ lawsuit. The FTC case however goes further to explicitly ask the court to unwind Facebook’s acquisitions of Instagram and WhatsApp.
“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive,” said Ian Conner, director of the FTC’s Bureau of Competition, in a statement.
The FTC case also echoes the State AGs’ claims about anticompetitive use of platform power, particularly Facebook’s practice of “cutting off API access to blunt perceived competitive threats.”
Facebook then gave a counter statement saying that both acquisitions had been cleared by regulatory agencies years ago and that overturning them after the fact would set a dangerous precedent.
Facebook CEO, Mark Zuckerberg also stated through emails that his intent to buy Instagram was primarily to neutralize a competitor while at the same time improving Facebook — by incorporating the features its competitor invented before any other upstart has enough time to catch up and pose a similar threat.
Shortly after Zuckerberg gave this explanation which reeked of selfish competition, he seemed to realise that his email proved counter productive because he then sent a follow-up reply, writing, “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,” he wrote.
Antitrust lawyers however saw that as an admission of guilt from Zuckerberg, who appeared to realize that what he wrote in those emails regarding his acquisition strategy constituted anticompetitive behavior.
The antitrust lawsuits filed by the States also delved into whether Facebook acquiring a company made the product worse off from a consumer benefit standpoint — in particular, with regard to privacy.
Facebook has always claimed that its resources and scale are responsible for turning apps like Instagram and WhatsApp into gigantic platforms with billions of users. However, there has been a gross display of anticompetitive behavior by Facebook especially in its purchase of WhatsApp and its decision to later use WhatsApp data in a manner which was not originally intended by the founding developers.
Even the creators of both apps have left the organisation while few like Brian Acton, the co-founder of WhatsApp have vocally disagreed with Facebook’s use of his creation and the current state of privacy on the platform.
Advocates for Antitrust cases in the US Congress have already began to applaud the lawsuits. A Representative, David Cicilline while applauding the FTC and other States’ Attorneys General for filing the suits, further described Facebook as “a monopoly which has broken the law and must therefore be broken up.”
Another representative, Nadler stated that Facebook trying to expand its dominance by buying over competition, should have never occurred, and that Facebook must be held accountable.
The lawsuit against Facebook stands as the second major regulatory effort from the US government to keep Big Tech in check, coming after the “Illegal Monopolization of online search and ad markets” suit filed against Google few months ago.
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