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Facebook Faces US Lawsuits That Could Force Sale of Instagram, WhatsApp

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Review Clears New Zealand Professor Over Report Documenting CCP’s Influence Operations

The Report The paper is an investigation by the professor into how China’s People’s Liberation Army (PLA) exploited civilian channels for military purposes in New Zealand. Brady, who specializes in Chinese domestic and foreign politics at UC, wrote in her latest paper that the Chinese Communist Party (CCP) “is preparing China for what the Chinese leadership believes is an inevitable war.” “The New Zealand government needs to work with businesses and universities to devise a strategy to prevent the transfer of military-end-use technology to China,” the research states. It also claims that a number of universities in New Zealand have links to the Chinese regime’s 5G telecommunications company Huawei, and that some academics have participated in Beijing’s well-financed recruitment program, the Thousand Talents Plan, which has come under close U.S.…

Facebook Faces US Lawsuits That Could Force Sale of Instagram, WhatsApp

WASHINGTON/PALO ALTO—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 Dec. 9, 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 Dec. 9 complaints 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 didn’t 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 don’t 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 such as 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 didn’t 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 didn’t 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 taken from Facebook’s own documents, such as 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 years-long 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 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 percent after the news before paring losses to close down 1.9 percent.

By Diane Bartz, Nandita Bose, and Katie Paul

Focus News: Facebook Faces US Lawsuits That Could Force Sale of Instagram, WhatsApp

Hong Kong Tycoon Jimmy Lai Denied Bail for a Second Time

Hong Kong pro-democracy media tycoon Jimmy Lai was denied bail for the second time in a month after he appeared briefly at court on Saturday for an additional charge under the Beijing-imposed national security law, according to local reports. The mainland-born 72-year-old was charged on Friday on suspicion of “colluding with foreign forces and endangering national security,” a criminal offense under the controversial law that carries a penalty of up to life imprisonment. Lai was brought to the West Kowloon Magistrates’ Court on Saturday morning, where Hong Kong Chief Magistrate Victor So denied him bail, and adjourned the case to April 16, 2021. Prosecutors need more time to further investigate more than a thousand posts from Lai’s Twitter account, as well as overseas visits related to calls for U.S. sanctions against…