FB Facing the Antitrust Heat from 47 US States

Move over, 2020 Presidential election. There’s a new lawsuit in town. 

Last week, NY Attorney General Letitia James “announced a massive antitrust lawsuit against Facebook, claiming the social media giant has harmed competition by buying up smaller companies like Instagram and WhatsApp to squash the threat they posed to its business,” writes Alex Castro in The Verge. 

“Forty-seven other state and regional attorneys general are joining the suit,” Castro continues.

The lawsuit, this one centering on FB’s acquisition of Instagram in 2011, accuses the company of stifling user growth on competing services. 

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” James said in a press conference last week. “Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance.”

This lawsuit joins the existing one from the FTC that alleges “illegal monopolization” and portend massive changes for the social platform, including possibly divesting Instagram and What’s App.

Castro previously reported on the looming Big Tech antitrust fight, and what it could mean not only for Facebook but for Amazon, Apple and Google. Of course, given Facebook’s previous performance in front of government bodies, Team Zuck probably deserves to go first. 

For far too long Facebook has acted with impunity, calmly setting aside billions for an expected FTC fine for alleged privacy penalties. Facebook has been taken to task for tracking user browsing and paying only lip service to legitimate privacy concerns. 

To be sure, the FTC suit is somewhat controversial; Facebook claims both their acquisitions were previously cleared by the organization, and it’s not fair for them to want a “do over” now. But emails between Zuckerberg and then-CFO David Ebersman imply specific strategy to prevent competitors from gaining a toe hold … and that clearly smacks of anti-trust behavior.

We’ll continue to follow Castro on this topic; his articles are thorough and informative, and there is a lot at stake here. As Rep Jerrold Nadler (D-NY) notes, buying up competing firms to expand their dominance should never have happened “… and accountability is long overdue.”