Facebook sued by 4 US tech companies for alleged anticompetitive practices

The plaintiffs in the lawsuit have alleged Facebook of inappropriately revoking developer access to its platform in order to harm the companies

Facebook has been sued by four US tech companies in the US federal court for allegedly flouting competition rules. The companies have alleged the social media giant of anticompetitive practices that resulted in harming and ruining prospective competitors.

This is the latest in the long list of setbacks for Facebook, which has been drawing the ire of regulators for quite some time now. Facebook isn't the only company that has been under pressure from antitrust bodies. A number of other tech giants too have been under the scanner of regulators for a while now.

What are the allegations?

Facebook logo
Facebook Reuters

The social media giant has been sued by four US tech companies who have alleged that Facebook inappropriately revoked developer access to its platform in a bid to directly harm the companies. The lawsuit has been filed at U.S. District Court for the Northern District of California.

The four tech companies are online marketplace-come social network Cir.cl, chat app Reveal Chat, identity verification firm Beehive Biometric and financial service provider Lendodo. Of the four companies, Reveal Chat was acquired by music streaming company Rhapsody in 2015, while Beehive Biometric and Cir.cl are now defunct.

The four companies in their lawsuit have now demanded Facebook's chief executive officer and chairman Mark Zuckerberg to sell majority of his stake in the social network. Yavar Bathaee, a partner at law firm Pierce Bainbridge and co-lead counsel in the case, told Reuters, "Facebook faced an existential threat from mobile apps, and while it could have responded by competing on the merits, it instead chose to use its might to intentionally eliminate its competition."

Facebook's troubles mount

install facebook   app on ios 11
The Facebook application is seen on a phone screen August 3, 2017 Thomas White/File Photo/Reuters

The plaintiffs have demanded for class-action status and unspecified damages now. Facebook has been facing pressure from regulators for a while now. The social media giant has been having a standoff with a number of small app developers across the globe.

A large number of small app developers had floated companies based on access to its user data. However, since 2012 Facebook started cutting off access for certain apps, while it continues to give access to many other apps.

Facebook isn't the only company that has been alleged of anticompetitive conduct. The lawsuit once again brings alive the argument that there should be more surveillance and scrutiny on big internet and tech companies on possibilities that with their size and reach can swallow up smaller players.

In July 2018, The Federal Trade Commission launched a antitrust investigation into Facebook. In September, a group of lawmakers on House Judiciary Committee started a similar investigation. Besides, the social media giant, which also owns Instagram and WhatsApp, faces a number of similar antitrust probes across the globe.

Related topics : Facebook Mark zuckerberg