A consortium of 48 attorneys general and the U.S. government filed antitrust lawsuits against Facebook Inc. on Wednesday, claiming it committed unlawful, anticompetitive acts that put rivals out of business and cemented its status as the pre-eminent social-networking giant.
Though not the first time Facebook has tangled with the FTC, it is the first time the company has faced antitrust charges from the regulator, which opened an investigation into the company last year.
Forty-eight attorneys general, led by New York’s Letitia James, have also filed antitrust charges, saying Facebook illegally stifled competition.
Central to both the FTC’s case and the state charges are Facebook’s $1 billion acquisition of Instagram in 2012 and its $19 billion purchase of WhatsApp in 2014. Both complaints say that Facebook used the deals to neutralize competitors it viewed as a threat.
“Personal social networking is central to the lives of millions of Americans,” Ian Conner, director of the FTC’s Bureau of Competition, 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.”
Rep. David Cicilline, D-R.I., chairman of a House subcommittee on antitrust matters, promptly praised the lawsuits. “Facebook has broken the law,” he said in a statement. “It must be broken up. I applaud the FTC and state attorneys general who are leading this effort today. This marks a major step in our ongoing work to bring the tech industry’s monopoly moment to an end.”
The company has mounted a two-pronged strategy in fending off antitrust charges. It has plowed resources into a lobbying effort while Facebook Chief Executive Mark Zuckerberg argues the purchases of Instagram and WhatsApp helped make it competitive in a market where upstarts such as TikTok flourish.
Both cases also cite how Facebook handling of third-party developers including its treatment of Twitter-owned Vine in 2013. Mark Zuckerberg approved an employee’s decision to cut off its access from one of Facebook’s APIs within hours of its public debut. The incident has also been cited by regulators in the UK.
The lawsuits also refer to Facebook’s controversial use of data acquired from VPN app Onavo, which it acquired in 2013. Stats pulled from the app, which could track which applications its users were spending time in, helped inform the company’s decision to buy WhatsApp and its pursuit of Snapchat. The company shut down the app last year after fallout from a separate privacy scandal.