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1 1 (February 16, 2021)

handle is hein.crs/govecge0001 and id is 1 raw text is: Congressional *Research Service informing the Iegisltive debate since 19 4___________________ The Facebook Antitrust Lawsuits and the Future of Merger Enforcement February 16, 2021 In December 2020, the Federal Trade Commission (FTC) and a group of 46 state attorneys general (state AGs) filed separate antitrust lawsuits against Facebook. Both lawsuits challenge the same conduct: Facebook's acquisitions of the photo-sharing service Instagram and the messaging app WhatsApp, and its treatment of software developers whose apps compete with Facebook products. Both complaints also seek noteworthy remedies-divestitures of Instagram and WhatsApp, plus limitations on Facebook's ability to engage in future mergers and acquisitions. This Sidebar reviews the lawsuits, flags the legal issues on which they will likely turn, and discusses proposals to amend the existing merger-enforcement regime. The Lawsuits The FTC and state AGs accuse Facebook of unlawfully monopolizing the market for personal social networking services. Their factual allegations are similar. In a nutshell, the complaints assert that Facebook has cemented its dominance in social networking by purchasing promising rivals rather than competing with them. The plaintiffs' first target is Facebook's 2012 acquisition of Instagram-then a rapidly growing photo- sharing app. The complaints reference several internal Facebook emails suggesting that the company viewed Instagram as a major competitive threat. After Facebook's efforts to develop its own standalone photo-sharing app stalled, it allegedly acquired Instagram to neutralize that threat. And Instagram continued its dramatic growth following the acquisition. Today, the photo-sharing service reportedly generates more than a quarter of Facebook's revenue and is among the most popular social-media platforms in the United States. The plaintiffs next address Facebook's 2014 purchase of the messaging service WhatsApp-a promising potential competitor. According to the lawsuits, Facebook feared that WhatsApp would eventually enter social networking by adding features to its core messaging product, thereby threatening Facebook's dominance. Again, the plaintiffs cite several internal emails in which Facebook executives describe messaging services like WhatsApp as the biggest threat facing the company. Since the acquisition, Facebook has allegedly limited WhatsApp to messaging and prevented it from entering social networking. Congressional Research Service https://crsreports.congress.gov LSB10575 CRS Legal Sidebar Prepared for Members and Committees of Congress

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