46 States Sue to Break Up Facebook ‘Monopoly’
Parallel legal action from the FTC and most states could force Facebook to divest Instagram and WhatsApp.
The Federal Trade Commission (FTC) and a coalition of attorneys general from 46 states, the territory of Guam and the District of Columbia, have filed parallel antitrust lawsuits accusing Facebook of anticompetitive behaviour that could ultimately force it to be broken up.
Both lawsuits were announced on Wednesday and primarily concern Facebook’s dominance in the social media landscape, as well as the possible anticompetitive nature of its acquisitions of Instagram and WhatsApp.
“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,” New York attorney general Letitia James, leading the coalition of attorneys general, said in a statement. “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.”
The FTC’s own suit, launched after a years-long investigation made in collaboration with the attorneys general, accuses Facebook of engaging in a “systematic strategy” of anticompetitive behaviour and seeks a permanent injunction in federal court that could force the social media company to sell of Facebook and WhatsApp.
Facebook vice-president and general counsel Jennifer Newstead pushed back on the FTC and coalition lawsuits in a statement. “The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago,” she said. “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”
Newstead later published a lengthy blog post describing both lawsuits as “revisionist history”.
Facebook’s stock fell by almost 2% by close of play on Wednesday following the news.