Meta, the owner of Facebook, allegedly failed to disclose crucial information to federal regulators during the original assessments of its Instagram and WhatsApp acquisitions, according to a recent court filing by the US Federal Trade Commission (FTC).
Bloomberg reported that the tech giant acquired the photo-sharing app Instagram in 2012 and the WhatsApp messaging platform in 2014. The FTC scrutinized both transactions, with Instagram undergoing a more in-depth review and WhatsApp undergoing a shorter 30-day assessment.
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FTC Sues Meta Over Instagram and WhatsApp Acquisitions
Over the years, the FTC has been criticized for its handling of these acquisitions. In 2020, the agency filed a lawsuit against Meta, accusing it of monopolizing the personal social networking sector by purchasing potential competitors.
Meta, in response, has asked to dismiss the case, arguing that it has already made substantial investments in the apps and that the FTC should not be allowed to revoke its prior approval of the mergers.
However, in its recent court filing, the FTC alleged that Meta withheld critical information during the original reviews, asserting that the case revolves around undisclosed documents possessed by Meta at the time.
According to the FTC, Meta requested a limited review of the acquisitions, thus restricting the information available to regulators. The agency now claims to have access to a wealth of evidence, including documents predating the acquisitions that Meta did not provide in 2012 and 2014.
Response of Meta to FTC's Claims
Meta had maintained that it fulfilled all legal responsibilities during the merger reviews of Instagram and WhatsApp. A company spokesperson refuted the FTC's allegations, saying the agency failed to provide substantial evidence to support its claims.
The spokesperson cited Meta's competitive landscape and the significant investments made in Instagram and WhatsApp, which, according to Meta, have ultimately benefited consumers by enhancing the functionality of these platforms.
The most recent submission to the court reflects earlier accusations leveled against Meta. In 2017, European antitrust authorities levied a substantial penalty against Meta for providing inaccurate information concerning the WhatsApp acquisition.
The FTC asserted that Meta has compromised the user experience across its platforms by intensifying the frequency of advertisements, especially on Instagram and Facebook. Additionally, the agency argued that Meta has not allocated adequate resources to foster innovation and improve features on Instagram.
The legal proceedings are overseen by US District Judge James Boasberg in Washington, and as of now, there is no indication of when a ruling might be issued on Meta's motion to dismiss or when a trial date will be set.
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