If prosecutors succeed, the cases could reshape the company, which has seen unbridled growth. Mark Zuckerberg, CEO of Facebook, has described the liquidation of the company as an “existential” threat. The company’s stock fell 2 percent to $ 277.70 per share after the lawsuit was announced.
The case is also widely viewed as a benchmark for future mergers within the tech industry that continued to boom during the pandemic. Last month, Facebook announced that it had bought Kustomer, a customer relationship management startup, for just under $ 1 billion.
Facebook said regulators ignored important stories.
“The most important fact on this case, which the Commission failed to mention in its 53-page complaint, is that it approved these acquisitions years ago,” said Jennifer Newstead, Facebook general counsel, in a statement. “The government now wants a revision and is sending a terrifying warning to American business that no sale is ever final.”
The company has also argued in the past that the social media market remains competitive. Executives have cited the rapid growth of TikTok, the Chinese short video sharing app, and the new growth of Parler, a social media company popular with conservatives, as evidence that Facebook is not banned from social networks.
The lawsuit against Facebook shows how important the company has become in connecting Americans with one another. The product of the same name grew to hundreds of millions of users within a few years. The landscape began to change until 2011, when cell phones were equipped with powerful cameras and posting photos on social networks became increasingly popular.
This created a competitive threat to Facebook: Instagram. Founded in 2010, the photo-sharing website saw explosive growth early on as a smartphone-based company that was perfectly attuned to mass adoption as the waves of consumers shifted away from desktop devices and focused on the mobile computers in their pockets.