Last week, the Federal Trade Commission and the Attorneys General of 47 states as well as the District of Columbia filed antitrust lawsuits against Facebook. Antitrust expert Herbert Hovenkamp, The James G. Dinan University Professor at the University of Pennsylvania Carey Law School discusses the filings in a Q&A.
According to Hovenkamp, both lawsuits seek to sue Facebook under the antitrust laws, and allege that recent Facebook acquisitions eliminate competition and make it harder for competitors to grow, focussing principally on Instagram and WhatsApp. While the acquisitions are one part of the complaint, the other issue addresses the exclusive agreements that Facebook made with various developers and creators of applications that are designed to integrate with Facebook.
“These agreements forbid these developers from competing with Facebook or writing for others who do so,” says Hovenkamp. “Facebook is basically saying, if you want to do business on Facebook, you have to agree not to provide equal access to competitors.”
Hovenkamp argues that the improper acquisitions claim argument is strong, and a solution would be for companies like Facebook and Google to utilize information sharing in the future. “One of the reasons these companies are big is because they are built on enormous databases of information.
“That’s Facebook’s attraction after all—that it’s got all this information so you can search and have widespread friends because everyone else is on it. And if we are sharing that information, it’s a lot less disruptive in the sense that you don’t have to unwind a business or try to recreate a different business. You could have one big information database that multiple competing companies could share.”
Read more at Penn Law News.