FTC, 48 AGs Tag Facebook With Bipartisan Antitrust Suits
Facebook is the subject of antitrust lawsuits from the FTC and attorneys general of both parties from 46 states, Guam and Washington, D.C. The FTC and AGs alleged separately Wednesday in the U.S. District Court in Washington that Facebook committed illegal, anticompetitive behavior in the social media market (see 2012090042). Lawmakers from both parties praised the suits. Facebook said government shouldn’t get a “do-over” on approved acquisitions and the company will defend itself.
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The governments seek remedies including possible divestitures of Instagram and WhatsApp. FTC Chairman Joe Simons joined the agency’s two Democrats signing on to the litigation, but fellow GOP members Noah Phillips and Christine Wilson voted no. Wilson doesn't plan to issue a statement, her office said. Phillips' office didn't comment.
“This is revisionist history,” said Facebook General Counsel Jennifer Newstead in a statement. “Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses.” Facebook invested billions to enhance Instagram and WhatsApp, she said. “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.”
The AGs look forward to collaborating with the FTC, said New York AG Letitia James (D) in a livestreamed news conference Wednesday. “For nearly a decade, Facebook has used its dominance ... to crush market rivals and snuff out competition,” James said. “No company should have this much unchecked power.” Facebook used vast money to acquire rivals before they could challenge dominance, with its $1 billion buy of Instagram in 2012 and $19 billion buy of WhatsApp in 2014 the most glaring examples, she said. Facebook’s behavior hurt innovation and privacy, she said. James and a bipartisan group of state AGs opened a Facebook antitrust probe in September 2019 (see 1909060016).
“We are filing this suit on behalf of the millions of consumers and small businesses who have been harmed by Facebook’s predatory behavior,” said Missouri AG Eric Schmitt (R).
“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” said FTC Competition Bureau Director Ian Conner. "Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”
FTC Commissioner Rohit Chopra supported the suits despite being an early Facebook user in 2004, the Democrat tweeted. “Since then, Facebook has broken the privacy promises that initially made it popular and has become infamous for a business model prone to abuse.”
"Facebook has broken the law. It must be broken up,” said House Antitrust Subcommittee Chairman David Cicilline, D-R.I., calling the company a monopoly. Through its dominance, Facebook has harmed privacy and “allowed disinformation to flourish on its platform, threatening our democracy,” he said. The platform avoided “real competition” through “anticompetitive acquisitions, unchecked power over consumers, and the failure of federal antitrust enforcers to take action,” said Sen. Richard Blumenthal, D-Conn. He seeks divestment of Instagram and WhatsApp and “strict conditions on how Facebook uses consumer data and competes with rivals.”
Unwinding Instagram and WhatsApp is a “necessity,” tweeted Sen. Josh Hawley, R-Mo.: “The @instagram and WhatsApp mergers with @Facebook were anti-competitive, they were meant to be anti-competitive, and they should be broken up.” Those acquisitions “have made the social media landscape less competitive and worse for users,” said Senate Antitrust Subcommittee ranking member Amy Klobuchar, D-Minn. “Big technology companies like Facebook should not have free rein to impose their will on the market, and they must be held accountable when they attempt to do so.” It appears Facebook bought Instagram and WhatsApp to expand its dominance without competing, said House Judiciary Committee Chairman Jerry Nadler, D-N.Y. “Facebook has illegally maintained its monopoly, allowing it to engage in other abusive conduct.”
The suits drew quick praise from Public Knowledge, Public Citizen, Open Markets Institute and Demand Progress. Critics included TechFreedom, the Competitive Enterprise Institute and Computer & Communications Industry Association.