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Facebook faces danger of losing Instagram and WhatsApp over monopoly issue

Facebook faces danger of losing Instagram and WhatsApp over monopoly issue

Facebook may eventually have to end up selling its prized possessions- Instagram and WhatsApp- as US federal regulators and more than 45 state prosecutors have sued the Mark Zuckerberg-controlled social media giant of illegal actions to buy up rivals and snuff out competition.

The antitrust lawsuits say Facebook “used its monopoly power to snuff out competition at the expense of everyday users” and confidence in the market should be restored. In order for Facebook to break its monopoly, it might have to part ways with its photo-centric social media platform Instagram and instant messaging service WhatsApp.

The Open Markets Institute, a Washington think tank that has been pushing regulators to take action against the market dominance of tech companies, said the lawsuits were a critical step forward. "There's still more to do, but this is a big moment," the organisation wrote on Twitter.

The Federal Trade Commission (FTC) is arguing that Facebook came to dominate this highly lucrative sector as it acquired its rivals illegally. In 2012 Instagram was growing rapidly. Facebook was worried and so it snapped up the company by paying up $1bn which is now considered a very low value for the company. Zuckerberg has admitted himself previously that Instagram was a competitor to Facebook.

WhatsApp too in 2014 was growing at incredible speeds and was seen as a threat to Facebook's own messenger service. The company was bought by Facebook for a whopping $19 billion.

Facebook issued a statement terming the government actions “revisionist history” that punishes successful businesses, and said the FTC itself had already confirmed the deals. The social media giant claims “customers can at any time choose to move to another product or service.” However, its critics argue there both Instagram and WhatsApp enjoy such as dominant position that there is no real alternative to them.

Facebook, Facebook Messenger, WhatsApp and Instagram – all owned by Facebook each have more than a billion monthly users. WhatsApp and Facebook have more than two billion.

The lawsuits come as US regulators are taking a closer look at the massive power exercised by the tech giants. A few months back the top bosses of Google, Amazon, Facebook and Apple were directed to testify before Congress in connection with the investigation being carried out over their market dominance . Search giant Google has also been sued by the Department of Justice for violating US competition laws to maintain monopoly on internet searches and online advertising..