New York Attorney General leading multi-state lawsuit looking to end 'Facebook monopoly'

Posted at 2:49 PM, Dec 09, 2020

NEW YORK (WKBW) — New York Attorney General Letitia James announced on Wednesday that 48 states including New York are filing a lawsuit alleging that Facebook is operating as a monopoly.

According to the lawsuit, James alleges Facebook, "illegally acquired competitors in a predatory manner and cut services to smaller threats — depriving users from the benefits of competition and reducing privacy protections and services along the way — all in an effort to boost its bottom line through increased advertising revenue."

James issued the following statement

For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users. Today, we are taking action to stand up for the millions of consumers and many small businesses that have been harmed by Facebook’s illegal behavior. Instead of competing on the merits, Facebook used its power to suppress competition so it could take advantage of users and make billions by converting personal data into a cash cow. Almost every state in this nation has joined this bipartisan lawsuit because Facebook’s efforts to dominate the market were as illegal as they were 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.

In the lawsuit, James cites Facebook's purchases of Instagram in 2012 and WhatsApp in 2014 as evidence of the social media giant reducing competition.

James mentions that Facebook is charged with allegedly violating Section 2 of the Sherman Act, in addition to multiple violations of Section 7 of the Clayton Act, two pieces of Untied States antitrust legislation.

Facebook released the following statement Wednesday night regarding the lawsuit

This is revisionist history. Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses. Instagram and WhatsApp became the incredible products they are today because Facebook invested billions of dollars, and years of innovation and expertise, to develop new features and better experiences for the millions who enjoy those products. 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 government now wants a do-over, sending a chilling warning to American business that no sale is ever final. People and small businesses don’t choose to use Facebook’s free services and advertising because they have to, they use them because our apps and services deliver the most value. We are going to vigorously defend people’s ability to continue making that choice.
Jennifer Newstead, Vice President and General Counsel, Facebook

The lawsuit was filed in United States District Court for the District of Columbia, you can read the entire lawsuit here.