US social media leader Facebook faces more controversy this week after the Federal Trade Commission (FTC) revived a dismissed court case, which accused the company of violating anticompetitive practices.
The FTC has revisited the claims with new evidence, which accuse Facebook of breaking anticompetitive practices after making acquisitions in 2021.
It is no secret Facebook has been proactively acquiring firms such as digital shared space developers Unit 2 and Big Box, earlier this year, as it transitions into a metaverse company.
Entering the virtual space race with full force, Facebook bought the two strong development teams who created popular titles Crayta and Population: One, with the latter becoming one of the most popular on the Oculus Quest 2 storefront.
But the FTC argues the acquisitions reignite anti-monopoly breaches in 2020. Facebook responded to the lawsuit on Thursday, saying:
“It is unfortunate that despite the court’s dismissal of the complaint and conclusion that it lacked the basis for a claim, the FTC has chosen to continue this meritless lawsuit. There was no valid claim that Facebook was a monopolist — and that has not changed”
The Original Lawsuit
The original 2020 filing claimed Facebook’s acquisitions led to unfair market shares that gave the firm the “power to control prices or exclude competition.”
But the FTC’s initial argument claimed Facebook’s buyouts, such as the 2014 purchase of Whatapp and 2012 acquisition of Instagram, allowed the US firm to create a monopoly on social media platforms.
Facebook’s acquisition of Instagram was worth $1 billion — the company’s biggest purchase at the time — but was dwarfed just two years later after it bought Whatsapp for a whopping $19 billion.
The appointed judge threw out the court case due to insufficient evidence at the time, leading the FTC to revisit the lawsuit and file additional evidence.
Legal Troubles for Facebook
The news comes after Facebook was hit with global pressure following a European Commission report, which found banned skin irritants in the Quest 2’s face guard, forcing the organisation to pull the headset from Amazon and eBay listings.
Following the developments, Facebook retired the Oculus Quest 2 64GB model and updated its stocks with a 128GB upgrade, with included silicon face guard replacements, set for release next week.
