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Facebook In Antitrust Defense To Say Feds Can't Just Revisit Instagram, WhatsApp Purchases: WSJ

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Facebook In Antitrust Defense To Say Feds Can't Just Revisit Instagram, WhatsApp Purchases: WSJ

Facebook Inc (NASDAQ: FB) lawyers claim that the government forcing a separation of WhatsApp and Instagram from the social media giant is a "complete nonstarter," the Wall Street Journal reported Sunday.

What Happened: The social media behemoth made claims in a paper produced by its staff — based on the work it commissioned from its lawyers Sidley Austin LLP — that an effort to break up the social media giant from Instagram and WhatsApp would be detrimental for consumers, cost billions of dollars, and defy existing legal provisions.

The social network giant contends that disentanglement between the platforms is nearly impossible as the company has invested large amounts to boost growth and numerous operations are now integrated.

Facebook’s purchase of Instagram in 2012 and Whatsapp in 2014 were reportedly sanctioned by the United States Federal Trade Commission without any objections.

The paper —prepared in defense against the antitrust probe — claims that the government's review of the acquisitions would send a “disquieting message to the business community.”

Tim Wu, a law professor at Columbia University, told the Journal that the FTC review of both acquisitions had provisions to revisit the deals at a later time.

Wu also dismissed the difficulty argument Facebook made saying, “There is no ‘it’s too hard’ defense.”

Why It Matters: Last month, it was reported that the FTC could begin antitrust proceedings against the Menlo Park, California-based company before the end of the year.

The regulator is said to be looking into statements made by Zuckerberg on how the social media giant’s policies and how it conducts business.

In an email, Zuckerberg had accepted that the reason behind buying Instagram was to “neutralize a competitor,” although he later backtracked on that statement, according to the Journal.

Meanwhile, Zuckerberg and fellow CEOs of Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and Twitter Inc (NYSE: TWTR) are due to testify before the Senate Commerce Committee on Oct. 28, CNBC reported

The testimonies are in regard to a rule that protects tech giants from liability arising out of content posted by users online. 

Price Action: Facebook shares closed 2.51% lower at $259.94 on Friday.

 

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