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Facebook faces U.S. lawsuits that could force sale of Instagram, WhatsApp

Facebook Inc could be forced to sell its prized assets WhatsApp and Instagram after the U.S. Federal Trade Commission and nearly every U.S. state filed lawsuits against the social media company, saying it used a “buy or bury” strategy to snap up rivals and keep smaller competitors……

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WASHINGTON/PALO ALTO (Reuters) – Facebook Inc could be forced to sell its prized assets WhatsApp and Instagram after the U.S. Federal Trade Commission and nearly every U.S. state filed lawsuits against the social media company, saying it used a “buy or bury” strategy to snap up rivals and keep smaller competitors at bay.

With the filing of the twin lawsuits on Wednesday, Facebook becomes the second big tech company to face a major legal challenge this year after the U.S. Justice Department sued Alphabet Inc’s Google in October, accusing the $1 trillion company of using its market power to fend off rivals.

The lawsuits highlight the growing bipartisan consensus to hold Big Tech accountable for its business practices and mark a rare moment of agreement between the Trump administration and Democrats, some of whom have advocated breaking up both Google and Facebook.

The complaints on Wednesday accuse Facebook of buying up rivals, focusing specifically on its previous acquisitions of photo-sharing app Instagram for $1 billion in 2012 and messaging app WhatsApp for $19 billion in 2014.

Federal and state regulators said the acquisitions should be unwound – a move that is likely to set off a long legal challenge as the deals were cleared years earlier by the FTC.

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James on behalf of the coalition of 46 states, Washington, D.C. and Guam. Alabama, Georgia, South Carolina and South Dakota did not participate in the lawsuit.

James said the company acquired rivals before they could threaten the company’s dominance.

Facebook’s general counsel Jennifer Newstead called the lawsuits “revisionist history” and said antitrust laws do not exist to punish “successful companies.” She said WhatsApp and Instagram have succeeded after Facebook invested billions of dollars in growing the apps.

“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” Newstead said.

Newstead also raised doubts about alleged harms caused by Facebook, arguing that consumers benefited from its decision to make WhatsApp free, and rivals like YouTube, Twitter and WeChat did “just fine” without access to its developer platform.

In a post on Facebook’s internal discussion platform, Chief Executive Mark Zuckerberg told employees he did not anticipate “any impact on individual teams or roles” as a result of the lawsuits, which he said were “one step in a process which could take years to play out in its entirety.”

Comments were turned off for Zuckerberg’s post, as well as for other posts on the lawsuits shared by Newstead and Chief Privacy Officer for Product Michel Protti, according to copies viewed by Reuters. Newstead also warned employees not to post about the cases.

Facebook did not immediately respond to questions about the posts.

PROTRACTED FIGHT

Zuckerberg told employees in July that Facebook would “go to the mat” to fight a legal challenge to break up the company, calling it an “existential” threat, according to audio of internal company meetings published by The Verge.

Although breakup remedies are rare, some antitrust experts said the case was unusually strong given damning statements by Zuckerberg plucked from Facebook’s own documents, like a 2008 email in which he said “it is better to buy than compete.”

Other experts such as Seth Bloom of Bloom Strategic Counsel said the FTC complaint was “significantly weaker” than the DOJ’s lawsuit against Google.

“We’re talking about acquisitions that are six or eight years old and it will be difficult for a court to order divestitures of many years ago,” Bloom said.

Investors echoed similar concerns.

“I do not know if the FTC or DOJ will be successful in breaking Facebook up. I’m assuming this will be dragged out in the courts as FB defends itself,” said Daniel Morgan, a portfolio manager at Synovus Trust in Atlanta, Georgia.

The lawsuits are the biggest antitrust cases in a generation, comparable to the lawsuit against Microsoft Corp in 1998. The federal government eventually settled that case, but the yearslong court fight and extended scrutiny prevented the company from thwarting competitors and is credited with clearing the way for the explosive growth of the internet.

Last month, Facebook said it was buying customer service start-up Kustomer, in an acquisition that the Wall Street Journal said valued Kustomer at $1 billion.

Facebook also bought Giphy, a popular website for making and sharing animated images, or GIFs, in May. That acquisition has already drawn scrutiny from the United Kingdom’s competition watchdog.

Facebook shares fell as much as 3% after the news before paring losses to close down 1.9%.

Reporting by Diane Bartz, Nandita Bose, David Shepardson and Katie Paul; Additional reporting by Elizabeth Culliford and Sinead Carew in New York; Editing by Chris Sanders and Lisa Shumaker

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Source: https://www.reuters.com/article/us-tech-antitrust-facebook/facebook-faces-u-s-lawsuits-that-could-force-sale-of-instagram-whatsapp-idUSKBN28J2UL

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Reuters

Disneyland Paris to re-open on June 17

Disneyland Paris (DIS.N) said on Monday that it would re-open on June 17, as French bars, restaurants and tourism sites gradually resume their operations after having been shut due to COVID-19 sanitary restrictions.

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The logo of Disneyland Paris is seen in Marne-la-Vallee, near Paris, as the theme park prepares to reopen its doors to the public following the coronavirus disease (COVID-19) outbreak in France, July 9, 2020. REUTERS/Charles Platiau

Disneyland Paris (DIS.N) said on Monday that it would re-open on June 17, as French bars, restaurants and tourism sites gradually resume their operations after having been shut due to COVID-19 sanitary restrictions.

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/lifestyle/disneyland-paris-re-open-june-17-2021-05-17/

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Reuters

Chip shortage to hit about 100,000 Mazda vehicles in 2021

Mazda Motor Corp (7261.T) said on Friday it expects a semiconductor crunch to affect around 100,000 of the Japanese automaker’s vehicles globally during the fiscal year.

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The logo of Mazda is pictured at the LA Auto Show in Los Angeles, California, U.S., November 20, 2019. REUTERS/Andrew Cullen

Mazda Motor Corp (7261.T) said on Friday it expects a semiconductor crunch to affect around 100,000 of the Japanese automaker’s vehicles globally during the fiscal year.

However, Mazda will fully leverage available inventory to minimize the hit to about 70,000 wholesale units, it said in a statement.

The worldwide shift to remote work and learning during the pandemic had boosted demand for laptops and other gadgets, exacerbating a global chip shortage.

The shortfall will cost automakers $110 billion in lost revenues this year, up from a prior estimate of $61 billion, consulting firm AlixPartners said, forecasting the crisis will hit the production of 3.9 million vehicles. read more

Automobiles depend on chips for everything from computer management of engines for better fuel economy to driver-assistance features such as emergency braking.

Our Standards: The Thomson Reuters Trust Principles.

The worldwide shift to remote work and learning during the pandemic had boosted demand for laptops and other gadgets, exacerbating a global chip shortage.

Source: https://www.reuters.com/business/autos-transportation/chip-shortage-hit-about-100000-mazda-vehicles-2021-2021-05-14/

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England to ease COVID restrictions further on May 17

England will press ahead with plans to ease COVID-19 restrictions further on May 17, including allowing people to meet indoors, thanks to favourable data on infections and vaccines, the government said on Sunday.

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Visitors to Greenwich Park sit and look towards Canary Wharf financial district as lockdown restrictions are eased amidst the spread of the coronavirus disease (COVID-19) pandemic in London, Britain, April 25, 2021. REUTERS/Peter Nicholls

England will press ahead with plans to ease COVID-19 restrictions further on May 17, including allowing people to meet indoors, thanks to favourable data on infections and vaccines, the government said on Sunday.

The country is in the process of gradually lifting its latest lockdown over a period of months, in line with a four-step plan unveiled in February.

Under Step 3 of the plan, as outlined when it was first announced, people will be allowed to meet up indoors for the first time in months, in groups of up to six people or two full households together.

Pubs, cafes and restaurants will be able to host customers indoors, also for the first time in months and subject to certain rules. Other indoor entertainment, hospitality and sports venues will also be able to resume activity.

Johnson’s Downing Street office said the latest data on COVID vaccinations, on infections, hospitalisations and deaths, and on the risk posed by new variants had been taken into account in deciding to move forward with Step 3.

“The data reflects what we already knew – we are not going to let this virus beat us,” Johnson said, according to a Downing Street statement.

“The roadmap remains on track, our successful vaccination programme continues – more than two thirds of adults in the UK have now had the first vaccine – and we can now look forward to unlocking cautiously but irreversibly.”

Johnson was due to provide further details at a news conference on Monday.

Semi-autonomous administrations in Scotland, Wales and Northern Ireland have their own separate timetables for easing COVID restrictions.

The United Kingdom has lost more than 127,000 people to COVID-19. It experienced a devastating second wave that peaked in late January, but since then the numbers of new cases and deaths have plummeted. read more

On Sunday, a total of 1,770 new cases and two new deaths were recorded across the United Kingdom. That contrasts with the situation during the second wave, when the daily number of new cases peaked at over 80,000 while the daily death toll was above 1,300 on the worst day.

There are also expected to be significant changes for the arts and events sectors under Step 3, with both indoor and outdoor venues allowed to host far greater numbers of people than for many months.

The government had already confirmed last week that international travel would be allowed to resume on May 17, although still with severe restrictions in place except for a handful of countries. read more

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/world/uk/england-ease-covid-restrictions-further-may-17-2021-05-09/

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