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Lawsuits & Litigation

Federal Government, State Attorneys General Suggests Facebook Should Be Broken Up

— December 10, 2020

More than 40 state attorneys general have filed an antitrust lawsuit against Facebook, with the federal government spearheading its own litigation.

The federal government and a coalition of state attorneys general have filed twin antitrust lawsuits against Facebook.

According to CNN, the Federal Trade Commission has been especially vocal in its demands that the social media company be reformed and downsized. The agency is seeking a permanent injunction that could, among other things, force Facebook to relinquish ownership of some of its most profitable purchases, including Instagram and WhatsApp.

The states, says CNN, are also requesting that Facebook be broken up if the courts deem such a decision necessary.

Ian Conner, the director of the FTC’s Bureau of Competition, suggested that Facebook has illegitimately used its resources and influence to eliminate or otherwise suppress its competitors.

“Personal social networking is central to the lives of millions of Americans,” Conner said in a statement. “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.”

CNN notes that the two lawsuits make similar claims. Both, for instance, are particularly critical of Facebook’s acquisitions of Instagram and WhatsApp—two of the most widely-used social media platforms in the world.

Facebook purchased Instagram for about $1 billion in 2012. Two years later, the company announced that it would buy WhatsApp—a messaging service widely used outside the United States—for nearly $20 billion.

Interestingly, the legal assault on Facebook does not appear to be partisan. New York Attorney General Letitia James has been investigating Facebook for well over a year. About 40 other attorneys general have since signed onto the suit, which was filed Wednesday.

Facebook and Twitter icons together on a smartphone screen; image by LoboStudioHamburg, via
Facebook and Twitter icons together on a smartphone screen; image by LoboStudioHamburg, via

“For nearly a decade,” James said, “Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition.

“By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived to be potential threats.”

However, attorneys for Facebook have argued that it was the federal government itself which allowed the company to grow and acquire new platforms.

“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,” said Jennifer Newstead, Vice President and General Counsel at Facebook. “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”

Newstead further claimed that people do not choose to use Facebook because they have no alternative, but because Facebook simply provides the best user experience.

“People and small businesses don’t choose to use Facebook’s free services and advertising because they have to,” Newstead said, “they use them because our apps and services deliver the most value. We are going to vigorously defend people’s ability to continue making that choice.”


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