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FTC files lawsuits against Facebook, could potentially break up the company

PHOTO CREDITS: BLOOMBERG/GETTY IMAGES

Two lawsuits have been filed against Facebook by the Federal Trade Commision and attorney generals from dozens of states on Wednesday, according to CNN.

The cases could potentially result in Facebook being broken up. The FTC and the states accuse Facebook of abusing its dominance in the digital marketplace and engaging in anti-competitive behavior. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” Ian Conner, Director of the FTC’s Bureau of Competition, said in a statement. “Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

Officials are specifically calling for two of the biggest apps in Facebook’s social media empire to be spun off into separate companies. The FTC is seeking a permanent injunction in federal court that could require Facebook to divest assets, including Instagram, which it bought for $1 billion in 2012, and WhatsApp,purchased for $19 billion in 2014, effectively breaking up Facebook as we know it.

Facebook has vowed to “vigorously defend” itself against the lawsuits. Additionally, any decision about whether to break up the company will likely take years to materialize. Facebook pushed back on the allegations laid out in the lawsuits, with its VP and General Counsel Jennifer Newstead criticizing the FTC’s scrutiny of the WhatsApp and Instagram deals, given that the agency itself “cleared these acquisitions years ago.” Newstead added, “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.” But former FTC chairman William Kovacic told CNN Business that competition watchdogs have every right to later change their minds about acquisitions in light of new evidence.

ENTERTAINMENT EDITOR: CONNOR KMIECIK

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