State, federal authorities expected to file antitrust lawsuits against Facebook on Wednesday
By Tony Romm Dec. 8, 2020 at 8:03 p.m. EST
More than 40 attorneys general and the U.S. government are preparing to file antitrust lawsuits against Facebook on Wednesday, alleging that the tech giant engaged in unlawful, anticompetitive tactics to buy or kill off its rivals and solidify its dominance in social networking.
The states’ lawsuit in particular is expected to allege that Facebook’s purchase of Instagram, a photo-sharing app, and WhatsApp, a messaging service, marked a pattern of behavior to neutralize competitive threats — allowing Facebook to become a market leader while depriving users of privacy-protective alternatives.
Three people familiar with the matter, who spoke on the condition of anonymity to describe a law enforcement proceeding, described the lawsuits and their timing while cautioning that the plans could still change. They said Democratic and Republican attorneys general, led by New York’s Letitia James (D), are expected to ask a judge as part of the legal salvos to consider a wide array of potential redress — including forcing Facebook to sell off some of its business to address competition concerns.
State officials are also expected to petition a judge to require Facebook to inform them before proceeding with any significant future transactions, according to the sources. The states are coordinating their lawsuit with the Federal Trade Commission, which joined the attorneys general in opening a probe into Facebook last year. The agency also plans to file as soon as Wednesday, the sources said, and its case is expected to track at least the broad contours of the states’ claims, which The Washington Post first reported last month.
A spokesman for James, the attorney general of New York, declined to comment. The FTC also declined to comment. Facebook did not immediately respond to a request for comment.
U.S. investigators initiated antitrust probes targeting Facebook last year. Dozens of attorneys general, led by James, promised a broad review, aiming to explore Facebook’s digital dominance and its ever-growing efforts to siphon users’ data. The FTC, meanwhile, took aim at Facebook almost immediately after concluding an investigation into the company over its entanglement with Cambridge Analytica, a political consultancy, that forced the tech giant to pay a $5 billion penalty.
Facebook, for its part, has mounted a massive lobbying offensive to try to rebut the allegations. Publicly, the company and its chief executive, Mark Zuckerberg, have sought to stress that Facebook’s purchases of Instagram and WhatsApp helped them grow into viable services in a larger market where newcomers, such as TikTok, are still able to thrive.
“A strongly competitive landscape existed at the time of both acquisitions and exists today,” spokesman Chris Sgro said in a statement in October. “Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”
But state and federal regulators have come to view Facebook’s ascendance much differently, and their imminent antitrust lawsuits are expected to lay out in wide-ranging detail how the company engaged in illegal, anti-competitive tactics to reach a pole position in social networking.
With WhatsApp, for example, antitrust investigators have seized on Facebook’s earlier promise to users that it would preserve the messaging company’s independence and strong privacy protections, according to the three sources who spoke on the condition of anonymity. But Facebook reversed course after it bought the company in 2014 and recently has sought to integrate its users’ data with the social networking site’s other services, sparking global concern given the company’s past privacy mishaps.
In other cases, investigators have focused on Facebook’s trove of information and the extent to which the tech giant has sought to weaponize it to quash potential rival developers, the sources said. State and federal antitrust agencies have explored how Facebook’s power and reach — and its unrivaled ability to occupy users’ time and eyeballs in the absence of alternatives — have allowed the company to maximize its profits as advertisers gravitate toward the platform, according to two of the sources.
Talk about making a ton of money, SPC Joshua Blotzer! I don't think the FTC would fine any company more than it's worth, or they wouldn't get their money. So, FB obviously has more hidden away. Not bad for a media site that doesn't charge for using it..........