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Forty-six U.S. states have filed a Facebook antitrust lawsuit accusing the social media giant of maintaining a monopoly harmful to its users and advertisers.
The lawsuit claims Facebook illegally maintains its monopoly through a “buy-or-bury strategy” that impedes competition in violation of the Sherman Act.
Joining the 46 states as plaintiffs are Guam and the District of Columbia. Only Alabama, Georgia, South Carolina, and South Dakota declined to join the lawsuit, according to Tech Crunch.
New York Attorney General Letitia James said Facebook’s domination of the market is illegal as well as harmful.
“Today’s suit should send a clear message to Facebook and every other company that any efforts to stifle competition, reduce innovation, or cut privacy protections will be met with the full force of our offices,” James said.
According to the Facebook antitrust lawsuit, more than half the U.S. population over the age of 13 uses the platform to engage with people, groups and interests. Instead of paying for the platform, “users exchange their time, attention, and personal data.”
Facebook, in turn, makes money by selling “highly targeted advertising” to firms that attach value to user engagement.
“The more data Facebook accumulates by surveilling the activities of its users and the more time the company convinces users to spend engaging on Facebook services, the more money the company makes through its advertising business,” the Facebook antitrust lawsuit explains.
However, the plaintiffs say, Facebook has had a monopoly over the social networking market for nearly 10 years.
Facebook has 2.7 billion users and a market value of nearly $800 billion, Fox40 reported. The company’s CEO, Mark Zuckerberg, is the fifth-richest individual in the world.
The Facebook antitrust lawsuit argues that the company’s conduct has been partly driven by the fear of falling behind “in important new segments and that emerging firms were ‘building networks that were competitive with’ Facebook’s and could be ‘very disruptive to’ the company’s dominance.”
Facebook’s conduct allegedly denies its users product improvements, causing them to suffer a reduction in both the quality and variety of available content and privacy options.
“By eliminating, suppressing, and deterring the emergence and growth of personal social networking rivals, Facebook also harms advertisers in a number of ways, including less transparency to assess the value they receive from advertisements, and harm to their brand due to offensive content on Facebook services,” the lawsuit says.
The plaintiffs point to Facebook’s acquisition of WhatsApp and Instagram, each of which the lawsuit claims presented a “unique and dire threat to Facebook’s monopoly.”
Each of those platforms had large and fast-growing user networks and had the potential to encroach on Facebook’s position in the market.
Facebook acquired Instagram for $1 billion and WhatsApp for $19 billion, Fox40 reported.
“Facebook kept both services running after the acquisitions to fill the void, so they would not be replaced by another app with the potential to erode Facebook’s dominance,” the lawsuit states.
In terms of relief, the plaintiffs are asking the court to order an end to Facebook’s “anticompetitive conduct” now and in the future.
They are also asking that Facebook be restrained from any further acquisitions “at or in excess of $10 million” without notifying the states involved in this lawsuit.
The Facebook antitrust lawsuit also asks the Court to find Facebook’s acquisitions of Instagram and WhatsApp violated the Clayton Act.
Each state is seeking an award of costs, including attorneys’ fees, and any other relief the Court deems “appropriate to restore competitive conditions and lost competition and to prevent future violations.”
Separately, the Federal Trade Commission (FTC) filed a lawsuit in federal court against Facebook that would require a divestiture of the company’s assets, including Instagram and WhatsApp, prevent Facebook from imposing anticompetitive restrictions on developers and require Facebook to seek approval on any mergers or acquisitions in the future, according to Deadline.
Also separately, two consumers filed a recent Facebook antitrust class action lawsuit claiming the company intentionally misleads people about its data privacy protections in order to attract more users.
The plaintiffs in that case claim Facebook is in violation of interstate trade and commerce laws and has become unjustly enriched. They say the nationwide Class of Facebook users they seek to represent could number in the tens of millions.
What do you think of the Facebook antitrust lawsuit? Do you think the company has a monopoly? Tell us your thoughts in the comments section below.
The plaintiffs are represented by their respective attorneys general.
The Facebook Antitrust Lawsuit is State of New York, et al. v. Facebook Inc., Case No. unknown, in the U.S. District Court for the District of Columbia.
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62 thoughts onAttorneys General in 46 States Have Brought a Facebook Antitrust Lawsuit
Ofcourse they do!!
Add me
Add us regular people to the lawsuit we don’t trust Facebook either. Even if the 46 states win Facebook is still under government surveillance and not private. Government agencies will have access to your “private” stuff.
Please add me
I agree . They have a monopoly
Please add me to the class action lawsuit
Facebook has not competition. There is a huge monopoly and not system bbn of checks and balances. They can basically make up their own rules regarding our privacy and piracy.
Yes I too believe that they have a monopoly it is too bad is as individuals cannot sue them also…
Agree, they have a monopoly and harvest users info for their own greedy needs. I wish I could sue them.
Yes they have a monopoly.