FTC and 46 States Sue Facebook in Massive Antitrust Suit

The suit demands that Facebook divest from WhatsApp and Instagram after years of anticompetitive behavior.
December 9, 2020, 8:04pm
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Image: Hannah McKay-Pool/Getty Images

The Federal Trade Commission and the attorneys general of 46 states filed a complaint today to break up Facebook's "illegal monopolization" of social networks and its "multi-year course of unlawful conduct."

The FTC is alleging that the company is illegally maintaining its social networking monopoly through a "years-long course of anticompetitive conduct."

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A release on the FTC's website says that "the complaint alleges that Facebook has engaged in a systematic strategy—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anti competitive conditions on software developers—to eliminate threats to its monopoly."

The suit is a potentially existential threat: The FTC is seeking to break up Facebook and to force it to divest from Instagram and WhatsApp, prohibit the company from imposing anti competitive conditions on its software developers, and require it to seek approval for future acquisitions. 

“Personal social networking is central to the lives of millions of Americans,” Ian Conner, Director of the FTC’s Bureau of Competition, said. “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.”

The lawsuit itself is blistering, and comes on the heels of a months-long investigation by the U.S. House of Representatives into tech monopolies: “Not content with attracting and retaining users through competition on the merits, Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire.”

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Cited as evidence throughout the lawsuit are emails from Facebook CEO Mark Zuckerberg to his staff that identify Instagram and WhatsApp as threats, and that say that Facebook can get ahead of threats from other social media by purchasing competitors and implementing social mechanics they’ve developed that have proven more popular than Facebook’s core products: “Even if some new competitors spring up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again,” Zuckerberg wrote in an email to staff that was cited in the lawsuit. “Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”

Facebook’s influence on social media as a whole is obvious even to the casual user. Beyond buying Instagram and WhatsApp, certain features of Facebook’s social media empire are direct ripoffs of its competitors, which it can then deploy to its massive userbase. Instagram’s Stories was a direct clone of Snapchat Stories. Facebook Stories is a copy of Instagram Stories. Instagram Reels is a direct copy of TikTok, and much of the content on Reels is taken directly from TikTok and reposted on Reels. 

The complaint comes after more than a decade of Facebook amassing unprecedented power by consolidating social media competitors which it either acquires outright or copies and pushes out of the market. The negative impact this had on the world has been devastating. Misinformation, much of it distributed and even promoted via Facebook's algorithms, is rampant. Hate speech, which Facebook has been reluctant and unable to moderate, has resulted in real world violence and in some cases even genocide.

While Facebook is directly to blame for much of this, today's complaint shows that the government has been asleep at the wheel while giant corporations have acted as if antitrust law didn't apply to them or would never be enforced. That has been mostly true

It’s too early to say whether the suit will stick, but the FTC rolled this out with bombast, including a video explaining the lawsuit as well as a question-and-answer page on its website.