The Federal Trade Commission and more than 40 states accused Facebook on Wednesday of buying up its rivals to illegally squash competition, and they called for the deals to be unwound, escalating regulators’ battle against the biggest tech companies in a way that could remake the social media industry.
Federal and state regulators of both parties, who have investigated the company for over 18 months, said in separate lawsuits that Facebook’s purchases, especially Instagram for $1 billion in 2012 and WhatsApp for $19 billion two years later, eliminated competition that could have one day challenged the company’s dominance.
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U.S., states sue Facebook as an illegal monopoly, setting stage for potential breakup
The U.S. government and 48 attorneys general filed landmark antitrust lawsuits against Facebook on Wednesday, seeking to break up the social networking giant over charges it engaged in illegal, anti-competitive tactics to buy, bully and kill its rivals.
The twin lawsuits filed in federal district court allege that Facebook under its CEO, Mark Zuckerberg, behaved for years as an unlawful monopoly — one that had repeatedly weaponized its vast stores of data, seemingly limitless wealth and savvy corporate muscle to fend off threats and maintain its stature as one of the most widely used social networking services in the world.
Major US lawsuits seek break up of Facebook
US federal regulators and more than 45 state prosecutors have sued Facebook, accusing the social media company of taking illegal actions to buy up rivals and stifle competition.
The lawsuits are one of the most significant legal actions the US government has taken against the firm.
Officials are asking the court to consider breaking up the company, which also owns Instagram and WhatsApp.
Facebook said the deals under scrutiny were approved by regulators years ago.
Facebook’s ‘monopoly’ must be split up, US and states say in major lawsuits
The US government and a coalition of 48 states and districts have filed parallel lawsuits against Facebook in a major antitrust offensive that accused the social media behemoth of anticompetitive behavior and could ultimately force its breakup.
At the heart of both antitrust actions, announced on Wednesday, is Facebook’s dominance of the social media landscape, and whether the company gobbled up potential competitors and blocked market access to others that could have eaten into its staggering market share.
FTC Sues Facebook for Illegal Monopolization
The Federal Trade Commission today sued Facebook, alleging that the company is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct. Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategy—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers—to eliminate threats to its monopoly. This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition.
The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions.
“Personal social networking is central to the lives of millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
Attorney General James Leads Multistate Lawsuit Seeking to End Facebook’s Illegal Monopoly
New York Attorney General Letitia James today filed a lawsuit against Facebook Inc., alleging that the company has and continues today to illegally stifle competition to protect its monopoly power. The lawsuit alleges that, over the last decade, the social networking giant illegally acquired competitors in a predatory manner and cut services to smaller threats — depriving users from the benefits of competition and reducing privacy protections and services along the way — all in an effort to boost its bottom line through increased advertising revenue. Attorney General James leads a bipartisan coalition of 48 attorneys general from around the nation in filing today’s lawsuit to stop Facebook’s anticompetitive conduct.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” said Attorney General James. “Today, we are taking action to stand up for the millions of consumers and many small businesses that have been harmed by Facebook’s illegal behavior. Instead of competing on the merits, Facebook used its power to suppress competition so it could take advantage of users and make billions by converting personal data into a cash cow. Almost every state in this nation has joined this bipartisan lawsuit because Facebook’s efforts to dominate the market were as illegal as they were harmful. Today’s suit should send a clear message to Facebook and every other company that any efforts to stifle competition, reduce innovation, or cut privacy protections will be met with the full force of our offices.”
Factbox: Lawsuits pile up as U.S. tackles Big Tech’s market dominance
The U.S. Federal Trade Commission and a big coalition of U.S. states sued Facebook Inc on Wednesday, saying that it broke antitrust law and should potentially be broken up. Facebook is the second big tech company to face a major legal antitrust challenge this fall.
The first out of the gate was the Justice Department complaint against Alphabet’s Google, which was filed in October. Previous to that, it had been known for more than a year that Google, Facebook, Amazon.com Inc and Apple Inc faced an array of antitrust probes on both the federal and state levels.
Lawsuits Filed by the FTC and the State Attorneys General Are Revisionist History
Billions of people use Facebook’s products every day. To earn their time and attention, we compete fiercely against many other services across the world. As the internet has grown over the last 25 years, the ways in which people share and communicate have exploded thanks to dynamic competition. The most successful platforms mature and adapt to people’s changing preferences. Our products became and remain popular for this very reason — we constantly evolve, innovate and invest in better experiences for people against world-class competitors like Apple, Google, Twitter, Snap, Amazon, TikTok and Microsoft. We innovate and improve constantly because we have to.
We provide many ways to communicate, share and connect — with people, businesses, news and entertainment. We also help millions of businesses reach and engage with their customers. More than 200 million businesses use our free tools and services to connect with customers, hire new employees and grow their businesses. Most of our advertisers are small businesses, many of whom have benefitted by moving online to reach their customers during the pandemic.