Facebook Inc., Instagram: Advertising Ads Can Go Free on Facebook

Facebook Inc. and Instagram Inc. are both facing lawsuits alleging they violated the antitrust laws by using fake profiles for advertising purposes. 

The cases, filed on Tuesday, are the latest skirmishes between the two technology companies over how to combat online fraud and manipulation. 

Facebook Inc., a social networking site, said on Thursday that it had been notified by the U.S. District Court for the District of Columbia that it was the subject of a lawsuit filed by Instagram Inc., which also has a business in the United States. 

Instagram has also launched a program that allows users to post their own photos, videos and messages. 

In a statement, Facebook said it had “taken action to identify, stop and stop-and-dismiss any activity that violates our rules or violates our user agreements.”

Instagram said in a statement that it would appeal the complaint. 

“The companies have been cooperating fully with our legal process and we will continue to vigorously defend them,” the Instagram statement said. 

Advertising is a lucrative business, with the industry worth about $18 billion, according to research firm Strategy Analytics. 

Google Inc., Facebook Inc, Twitter Inc and Microsoft Corp. all use artificial intelligence to make money from advertising. 

But their techniques can make it hard to track what’s being bought and sold and can give rise to allegations of illegal conduct, according to the National Advertising Law Center, a nonprofit advocacy group that works to combat fake advertising.

The complaints filed Tuesday allege that Facebook’s advertising products violate federal anti-trust law by using accounts that have been created for “commercial purposes,” such as selling ads. 

A Facebook spokesman declined to comment.

Instagram said its ad program allows users with a verified Facebook account to post photos, stories and messages that are created by other users, with approval from Facebook, and posted on the social network. 

Its software allows users and companies to share a profile with a group of people who can then vote and rate the posts. 

It’s unclear if the suits seek a damages award, but the companies are facing potential legal bills of up to $150 million, according the National Advertising Law center. 

This article was updated at 5:30 p.m.

ET on Sept. 16, 2018, to include the latest information.

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