The U.S. federal government recently joined with state governments to sue Facebook for monopoly, asking Facebook to divest WhatsApp and instagram that it has acquired. This lawsuit is so huge that Facebook seems to have a bad future. Will Zuckerberg’s social Empire built by acquisition fall apart? < / P > < p > the US Federal Trade Commission (FTC) is a tough nut to crack for Facebook, which has been fined $5 billion by the FTC for analyzing privacy leaks in Cambridge. At present, FTC has 46 states in the United States, and it seems that there is no chance of winning an anti-monopoly case. < p > < p > on Wednesday, FTC took a big step towards splitting Facebook, formally filing an antitrust lawsuit against Facebook, accusing it of abusing its monopoly power in the social network field to stifle competition. FTC and the U.S. state alliance have focused on two major Facebook acquisitions: instagram, a picture sharing app, for $715 million in 2012, and WhatsApp, a chat service, for $22 billion in 2014. In its lawsuit on Wednesday, FTC said the acquisitions were aimed at “eliminating” the threat of competition. Now, FTC requires Facebook to spin off both businesses. The proposal poses a threat to the social Empire built by Facebook CEO Mark Zuckerberg. < / P > < p > since most of Facebook’s revenue growth comes from instagram, and WhatsApp is the key to Facebook’s bet on digital commerce, the loss of these two platforms will threaten to erase most of its long-term value. Facebook shares have soared more than 35% this year, falling 4% on Wednesday and 2% at the end of the day. < / P > < p > “a spin off would be terrible for investors because it could damage the business model in a way.” Dan ives, an analyst at Wade Bush securities, said he saw instagram as one of the three best commercial acquisitions in the past 15 years. < / P > < p > Facebook is able to acquire these promising rival platforms precisely because it expects its major social networking applications to decline one day, and it wants to be the company that decides which apps people will switch to in the future. The spin off will undermine most of Zuckerberg’s safeguards for Facebook’s future, and by this time his huge investment in instagram and WhatsApp is beginning to pay off. Facebook argues that it is these investments that make instagram and WhatsApp today. < / P > < p > “our acquisitions of instagram and WhatsApp have significantly improved these services and helped them reach more users,” Zuckerberg wrote to employees on Wednesday. “We strive to compete and compete fairly, and I’m proud of that.” < / P > < p > Facebook’s flagship social network is running out of advertising space, but adding too many ads to the information flow can affect the user experience. As a result, Facebook is now working hard to tap the revenue potential of shopping. This year, Facebook has tried to get users to shop directly from instagram’s images and videos, and integrate its global business to communicate with customers using WhatsApp. Facebook has tried to combine these business ambitions with its main social network, such as requiring companies to have a Facebook page to run instagram ads. Facebook also plans to eventually connect WhatsApp’s chat service with instagram’s shopping. But without WhatsApp and instagram, Facebook’s path to becoming an e-commerce giant looks much harder. < / P > < p > in some of the most valuable markets, Facebook’s user base has begun to peak. For years, Facebook has warned that the advertising space in its main stream is saturated. This means that Facebook’s recent growth momentum is mainly from instagram. In 2019, instagram generated $20 billion in revenue, equivalent to about 29% of Facebook’s total advertising revenue last year. Research firm emarketer expects instagram to generate $28.1 billion in revenue this year, accounting for about 37% of Facebook’s total advertising revenue. This means that instagram’s annual revenue increase of $8.1 billion will account for the vast majority of Facebook’s advertising revenue increment. < / P > < p > at the same time, WhatsApp contributes almost no revenue to Facebook. But with WhatsApp betting heavily on payment, e-commerce and customer service tools for its more than two billion users, the non revenue generating situation is expected to change soon. Any revenue from WhatsApp will further boost Facebook’s growth. < / P > < p > WhatsApp and instagram are crucial to Facebook’s international strategy, and they provide a strong foothold for Facebook in fast-growing markets such as Brazil and India. In some countries, WhatsApp or instagram has far more users than Facebook. In India, for example, WhatsApp has more than 100 million users than Facebook, according to emarketer. That’s important for Facebook because it sees India as the next big internet frontier. Facebook is already worried that Chinese competitors may be ahead of India. In Japan, instagram has more than 70% more users than Facebook. < / P > < p > while Facebook is still the largest social network in most parts of the world, instagram and WhatsApp have greatly expanded Facebook’s reach compared to fighting alone. Without these two platforms, Facebook’s total user base will fall sharply, which will impact revenue. < / P > < p > everyone uses Facebook, except teenagers. The Pew Research Center survey found that 51 percent of 13 to 17 year olds said they used Facebook in 2018, down from 71 percent in previous years. By comparison, 72% of American teenagers use instagram. < / P > < p > among the younger generation of Internet users, Facebook is less popular than ever, in part because of the more intense competition among generation Z consumers. Instagram has been Facebook’s secret weapon against snapchat’s competition after reading, and may eventually become a bastion against tiktok, a popular short video upstart. Without instagram, Facebook needs to develop its own products to attract the youngest and most coveted Internet users, which is hard to achieve in the near future. There is no sign that Facebook will suddenly be able to do that without instagram. < / P > < p > as Facebook has gone through privacy leaks, false information and election disruption scandals, more and more people say they will leave Facebook and use instagram and WhatsApp as alternatives to connecting with friends and family online. Although they are part of the Facebook family, Facebook knows that instagram and WhatsApp have a more positive public reputation. Facebook has recently branded other members of its platform family with a Facebook brand in order to win back some of the positive feelings. Instagram, for example, is labeled “Facebook’s instagram.”. Without instagram, Facebook will not be able to benefit from any of the more positive impressions that instagram has gained among its users. < / P > < p > If Facebook eventually needs to spin off WhatsApp and instagram, it won’t be the only company in a tough situation. For the past six years, WhatsApp has not focused on growth or profitability, but on user growth, business reliability, and encryption. This freedom is thanks to Facebook’s robust advertising business, which pays WhatsApp for its freedom. WhatsApp is building a business, but there is no guarantee that it will pay off. Without Facebook’s strong financial support, WhatsApp will face a lot of revenue generating pressure. < / P > < p > similarly, many of instagram’s business operations rely on Facebook, including the technology that underpins its advertising business and content auditing. The separation from Facebook means instagram needs to create a brand new advertising platform, and it will also be cut off from access to important target data (obtained from Facebook user profiles), so that the advertising relevance on the application will be reduced. < / P > < p > instagram also relies heavily on Facebook’s automated content monitoring tools to combat hate speech, content, and other types of inappropriate user posts. To enhance security, Facebook has invested billions of dollars to develop and maintain the system. An independent instagram may need to develop these tools independently. < p > < p > Margrethe vestager, the head of EU antitrust, today hailed the US antitrust action against Facebook. < p > < p > she told lawmakers in Brussels that the US government’s action on Wednesday was “very encouraging” and showed that technology giants were facing increasingly stringent regulatory scrutiny around the world. < / P > < p > “it’s a sign that the debate over the dominance of technology over the past few years is shifting,” she said in an online meeting with members of the European Economic Commission on Thursday. “You can see this discussion in almost every jurisdiction, action against Google in Canada, in Australia and recently in the United States.” < / P > < p > the EU is currently investigating Facebook’s data and sales platform. According to the financial times, a draft EU regulation to be released next week shows that the EU will require “super large” technology companies such as Facebook and Amazon to take greater responsibility in monitoring the Internet, or they will be fined up to 6% of their annual turnover. < p > < p > Avis believes that without legislative changes from Congress, there is “little chance” that Facebook will actually spin off. He also believes that Congress is unlikely to make legislative changes. < / P > < p > although spin off remedies are rare, some antitrust experts say the FTC lawsuit is particularly persuasive, given Zuckerberg’s firm statements mined from Facebook’s own documents. For example, Zuckerberg said in an email in 2008: “acquisitions are better than competition.” Seth bloom, founder of bloom strategic Council, an antitrust analyst in Washington, said: “we are talking about acquisitions six or eight years ago, and it’s hard for the court to order divestiture of transactions completed years ago.” < / P > < p > investors have expressed similar concerns. “I don’t know if the FTC or the justice department can successfully spin off Facebook, but I think the case will drag on in court as Facebook launches its own defense.” Said Daniel Morgan, portfolio manager at synovus trust, an investment trust. < / P > < p > in the short term, Facebook seems secure. But in the long run, any sign that FTC is seeking to spin off Facebook is likely to further pressure Facebook’s share price. The report shows that the number of app store purchases soared in the first half of this year due to the impact of covid-19