US Government Files Major Lawsuit Against Facebook
Dozens of state and federal government bodies have sued Facebook in twin antitrust lawsuits that allege the social media platform has “abused its dominance in the digital marketplace and engaged in anticompetitive behavior.” The Federal Trade Commission (FTC) is specifically seeking a permanent injunction to be made in federal court that would require Facebook to divest its assets, which includes popular social media apps Instagram and WhatsApp.
“Personal social networking is central to the lives of millions of Americans. 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,” said Ian Conner, Director of the FTC’s Bureau of Competition, in a statement to the press.
The multiple lawsuits have been months in the making and reflect a major point of contention that has existed in the tech industry for awhile now. Facebook acquired Instagram back in 2012 in a deal worth $1 billion. Two years later it announced that it was buying WhatsApp in a deal that was worth $19 billion.
New York Attorney General Letita James made an announcement around 14 months ago that claimed her office was leading a group of attorneys in investigating Facebook for alleged anti competitive practices. More than 40 attorneys general signed onto the complaint that was filed against the platform this week. The FTC investigation has been completely separate from what James has been working on, however, the two legal complaints essentially regard the same issues.
“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition.”
James continues to claim that “by using its vast troves of data and money, Facebook has squashed or hindered what the company perceived to be potential threats.” The New York state suit involves a court order that demands Facebook notify state officials of any future business deals and acquisitions worth $10 million or more.
Facebook has over 3 billion users worldwide across its portfolio of apps. The dominance has raised a lot of concerns for competing platforms and brands in the industry, especially with the way that Facebook has been involved in the elections and with Trump’s administration in general. Google was involved in a similar federal suit this year after it was alleged that the company had “stifled its competition” in order to maintain its power as the most popular search engine.
The issue of having “too much power” has existed within the tech industry since the dawn of its creation. Potential anticompetitive behavior is the most prominent in that industry in particular, and is one of the greatest threats to the way our economy works, according to the lawsuits. For Facebook, government officials will now work to prove that the company’s misconduct led to real-world harms to its competitors, and users.
In another allegation, state officials claim that Facebook has opened up its platform to third-party app developers, however, once the multi-billion dollar company perceives those developers as a threat, it cuts off its services and funding as a means of killing it before it grows too large.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at eric.mastrota@thenationaldigest.com.
