The federal government and 46 state attorneys general are suing Facebook, accusing the social media giant of using illegal tactics to maintain its dominance.
The states’ lawsuit, led by New York Attorney General Letitia James, alleges that Facebook squashed potential rivals by buying up smaller competitors and closing off its platform to developers of apps it perceived as a threat. In the process, it weakened privacy protections for users of its platform, she said.
“For nearly a decade, Facebook used its dominance and monopoly power to crush smaller rivals, at the expense of users,” James said in a press conference on Wednesday. “No company should have this much unchecked power over our personal information and our social interactions.”
The suit is filed on behalf of 46 U.S. states, the District of Columbia and Guam. Alabama, Georgia, South Carolina and South Dakota did not join.
The Federal Trade Commission filed a parallel lawsuit Wednesday. Both suits are asking the courts to force Facebook to spin off Instagram and WhatsApp, as well as to seek government approval for future mergers.
Focus on Instagram and WhatsApp deals
Both lawsuits cite Facebook’s 2012 purchase of Instagram for $1 billion and a $19 billion deal for WhatsApp in 2014 as examples of its efforts to eliminate competitors. Those acquisitions let Facebook solidify its social media dominance while depriving users of privacy-focused alternatives, prosecutors allege.
“After identifying two significant competitive threats to its dominant position — Instagram and WhatsApp — Facebook moved to squelch those threats by buying the companies, reflecting CEO Mark Zuckerberg’s view, expressed in a 2008 email, that ‘it is better to buy than compete,'” the FTC said in its suit. “To further entrench its position, Facebook has also imposed anticompetitive conditions that restricted access to its valuable platform — conditions that Facebook personnel recognized as ‘anti user[,]’ ‘hypocritical’ in light of Facebook’s purported mission of enabling sharing, and a signal that ‘we’re scared that we can’t compete on our own merits.'”
For Facebook, the coordinated federal and state lawsuits represent the most aggressive legal action against the company to date by government authorities, culminating a bipartisan campaign to rein in big technology companies. It’s the second time in two months that the government has moved against a tech giant.
In October, the Department of Justice filed an antitrust suit against Google, accusing the search giant of exercising monopoly power. Republicans in Congress and President Donald Trump have also sought to roll back a 25-year-old law that protects internet companies from liability for users’ posts.
Facebook fires back
Although it remains to be seen if the Biden administration is equally determined to wage what is sure to be a long legal campaign against Facebook, a sense that the social media company is too powerful has united some lawmakers and policymakers across the aisle.
Facebook did not immediately respond to a request for comment, but noted on Twitter that the FTC previously cleared the Instagram and WhatsApp acquisitions.
“Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day,” Facebook tweeted.
The world’s dominant social network, Facebook counts 2.7 billion users and leverages access to their attention for its immensely profitable advertising business. The company took in nearly $70 billion in ad revenue last year and is valued by investors at $800 billion.
