New York attorney general leads 48-state lawsuit against Facebook

The anti-monopoly authorities and attorneys general of almost all states of America applied to the court. They demand that Facebook sell Instagram and WhatsApp, while accusing the tech giant of violating antitrust laws. New York Attorney General Letizia James leads a coalition of 48 states that filed a class action lawsuit, the newspaper writes Deadline.

The federal government and attorneys general of 48 states on Wednesday, December 9, filed a class action lawsuit against Facebook. The tech giant has been accused of abusing its dominant position in the social media market to suppress competitors.

New York Attorney General Laetitia James at a press conference accused Facebook of "using colossal amounts of money" to get rid of competitors, stifle innovation and compromise the privacy of millions of consumers.

The lawsuit says the company deliberately acquired smaller competitors such as Instagram and WhatsApp to stifle competition, and it uses its monopoly position to destroy users' privacy. If successful, this lawsuit could lead to the first breakup of an American company in decades.

As the publication clarifies MeduzaFacebook acquired potential competitors, namely Instagram and WhatsApp, in 2012 and 2014, respectively, and imposed restrictions on the use of the platform for third-party developers, which are also aimed at eliminating potential threats to the company's monopoly position.

“For nearly a decade, Facebook has used its dominance and monopoly power to drive out smaller competitors, all at the expense of users,” James said. “Today we are taking action to protect the millions of consumers and many small businesses affected by Facebook's illegal activities. Instead of competing on the merits, Facebook used its power to suppress the competition so that it can take advantage of these advantages and make billions from users' personal data. "

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She added that nearly every state joined the lawsuit "because Facebook's efforts to dominate the market were as illegal as harmful." “Today's lawsuit should send a clear signal to Facebook and every other company that any effort to suppress competition, curtail innovation or protect privacy will be met by our offices,” added James.

The Federal Trade Commission (FTC, an independent agency of the government) requires a permanent injunction, which may, among other things: require the sale of assets, including Instagram and WhatsApp; stop Facebook from imposing anti-competitive terms on software developers; require Facebook to request prior notice and approval for future mergers and acquisitions.

“Social media is central to the lives of millions of Americans,” said Ian Conner, director of the FTC's Competition Bureau. “Facebook’s actions to consolidate and maintain its monopoly deprive consumers of the competitive advantage. Our goal is to end Facebook's anti-competitive behavior and restore competition so innovation and free competition can flourish. ”

The antitrust class action lawsuit against Facebook is the second round of government action previously targeted at tech giants. As a reminder, in October 2020, the Department of Justice and 11 state attorneys general filed a lawsuit against Google for abuse of its dominant position in online search and online advertising.

A voluminous report released earlier this month by the US Chamber's Judicial Subcommittee on Antitrust, Trade and Administrative Law named Facebook, Google's Alphabet, and Amazon and Apple as monopolies.

Facebook acquired Instagram for $ 1 billion in 2012 and bought WhatsApp two years later, in 2014, for $ 19 billion. Zuckerberg said companies often make acquisitions in the normal course of business, and he offers a free service to users without requiring them to register on the platform.

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Antitrust issues have become intertwined with consumer privacy, hate speech, and free speech, as Congress has repeatedly called on the CEOs of Facebook, Twitter, and Alphabet to discuss how their giant companies are moderating content.

The Justice Department's lawsuit against Google, filed just two weeks before presidential election day, fueled allegations of political motivation as it was initiated by US Attorney General William Barr, a longtime ally of President Donald Trump, a frequent critic of Google.

The FTC is an independent regulator with three Republicans and two Democrats on its board.

President-elect Joe Biden has previously said the need to consider a possible divestiture of tech giants. He also called Mark Zuckerberg "a real problem," writes Voice of America.

James announced in September 2019 that she is leading a coalition exploring the activities of Facebook, which has over 2,7 billion monthly active users and a billion daily users.

The FTC began monitoring Facebook in July 2019, investigating the scandal between Facebook and Cambridge Analytica. The head of Cambridge Analytica, Alexander Nix, said that the company used data obtained in the course of "Facebook surveys." The scandal cost Facebook a $ 5 billion fine and forced the company's management to revise its privacy policy.

Reporter David Cicilline, chairman of the House of Representatives antitrust subcommittee, said, “Facebook broke the law. I applaud the FTC and the state attorneys general who are leading this effort today. This marks an important step in our ongoing work to end the monopoly in the technology industry. ”