The states claim that Facebook has unfairly sought to limit competition by acquiring its rivals.
A coalition of 46 states, as well as Washington, D.C., and Guam, have asked a federal court to reinstate a lawsuit against Meta Platforms, Inc., the owner Facebook.
According to The Hill, the drive to revive the lawsuit is being led by New York, and includes every state except Alabama, Georgia, South Carolina, and South Dakota. Collectively, state-level prosecutors are seeking to challenge Meta’s acquisition of high-profile social media platforms including WhatsApp and Instagram.
On Monday, New York Solicitor General Barbara Underwood argued that a lower court decision finding that the plaintiffs had waited too long to file their lawsuit was flawed.
“Forty-six states, and D.C. and Guam, have alleged that Facebook, now Meta, has used its monopoly power to buy or bury potential competitors,” Underwood said in oral arguments.
The states claim that Meta has acquired many of its most prominent competitors and has taken steps to curtail other potentially competitive behavior on its platforms.
“As a result, it has stifled competition and denied consumers the improvements in service and other benefits that competition provides. The states bring this action to protect the public from the continuing harm caused by this conduct,” Underwood said.
Underwood said the lower court judgment was made in error, observing that Facebook is facing a similar lawsuit from the Federal Trade Commission.
“There was no harm to Facebook from the states filing their complaint in 2020 instead of a few years earlier,” Underwood said.
The Hill notes that the federal Department of Justice supported the states’ arguments, with an agency Antitrust Division attorney present at proceedings.
Facebook, adds The Hill, acquired Instagram in 2012 for $1 billion and WhatsAapp in 2014 for $19 billion.
Attorneys for Meta say that, if the states had genuine objections to the acquisitions, they should have raised them at the time, rather than waiting nearly a decade to file suit.
“The transactions look place in 2012 and 2014, and all of this conduct was, of course, quite open and publicized at the time … And yet we see a suit that’s filed at the end of 2020. The doctrine of laches exists to prevent that kind of unfair delay,” Meta attorney Aaron Panner said in court.
The presiding judge appeared at least somewhat skeptical of the states’ claims, asking who Facebook’s competitors are while noting that news articles indicate that the company has increasingly struggled to retain younger users.
Panner responded by saying that TikTok, Twitter, and other platforms actively compete with Meta for users—often to Facebook’s detriment.
“Sometimes facts that are good for an antitrust defense are bad for business,” Panner added.