40 U.S. states seek antitrust lawsuit against Facebook


On November 25th, Eastern Time, the recent antitrust hearings held by Congress are only the beginning of real trouble for Facebook. Federal and state investigators are now preparing a lawsuit against Facebook, and nearly 40 state attorneys general have said they will sign off on a case that could face Facebook’s toughest regulatory challenge in its nearly 17-year history.

The U.S. Federal Trade Commission and a bipartisan group of dozens of state attorneys general are in the midst of a campaign against Facebook, according to reports by the Washington Post and Reuters, citing people familiar with the matter. The final stage of filing one or more major antitrust lawsuits will see results in early December.

FTC staff recommended that commissioners sue the social media company in federal court, which would allow 41 states, led by New York, to join the lawsuit, one of the sources said. The FTC and states have yet to determine how they will file the lawsuit. They can sue individually in district court, and states can sue individually, or join forces to sue. If each sued, Facebook could face two major antitrust issues in two separate lawsuits in early 2021.

Federal and state legal battles have yet to be finalized, the sources said, meaning investigators could still change their minds to potentially have the greatest impact in court. State legal action is likely to be discussed on a conference call on Wednesday, while the FTC is likely to be finalized on Friday, and unlike the Justice Department, the term of the FTC commissioner is not affected by the presidential election.

Facebook case traces back to early acquisitions

The survey looks at how Instagram and WhatsApp have changed in the years since they were acquired by Facebook. Investigators are primarily looking to tease out whether the post-acquisition platform has worsened the user experience and reduced privacy protections. Take messaging software WhatsApp, which Facebook promised users when it was acquired in 2014 that it would maintain WhatsApp’s independence and strong privacy protections. It made the same promise to regulators, who then approved the deal. But years later, Facebook reversed course, trying to integrate user data with the social network’s other services. The move raises new concerns given the tech giant’s past missteps on privacy.

Investigators are also closely watching Facebook’s management of its vast user data and how third-party app developers access it. Investigators believe that Facebook will use the vast amount of data in its hands as a weapon to compete with later competitors.

The FTC and states have agreed on similar charges, though their charges in court have not yet been finalized. Sources say they believe Facebook’s $1 billion acquisition of photo-sharing app Instagram in 2012 stifled competition in the related space, weakened its privacy protections after it bought WhatsApp for $22 billion in 2014, and By selectively refusing to share user data, it weighed on competitors.

Previously, the House Judiciary Committee report also pointed out that Facebook uses its superior market data to identify potential future competitive threats, eliminate threats by copying or buying, or stifle competition by restricting access to Facebook’s data.

Zuckerberg opposes allegations of threats

Facebook CEO Mark Zuckerberg, who has publicly or privately inspired lobbying against the allegations, stressed to lawmakers at a hearing in July that his company’s acquisitions of Instagram, WhatsApp and others did not threaten competition, while is to allow these services to flourish around the world.

Zuckerberg continued to defend the conduct during a Senate Judiciary Committee hearing earlier this month. He claimed that Facebook did not see Instagram as a direct competitor. Even after Sen. Amy Klobuchar (D-Minnesota) pointed out in an email that Zuckerberg made it clear that buying Instagram would suppress competitors, he explained that he did not think it would Will become a massive social sharing platform: “In fact, people at the time kind of laughed at our acquisition because they thought we spent too much money on something that was almost shared as a photo at the time.”

But last year, Zuckerberg took a more aggressive tone, privately promising to tackle any antitrust case aggressively. Earlier, Sen. Elizabeth Warren, Democrat of Massachusetts, pledged to make the tech industry part of her 2020 bid for the Democratic presidential nomination. “I don’t want to file a major lawsuit against our own government, but if someone tries to threaten something that exists, I’m going to come forward,” Zuckerberg said at a private gathering with Facebook employees.

When he found that the investigators didn’t buy it, he turned the fire on Douyin’s American version of TikTok, saying that the entry of these new platforms is the best proof that Facebook has not prevented the same type of software from invading the market. The “Reel” app with short video function was placed at the top of the page, which is enough to see Facebook’s “competition, imitation, acquisition” series of routines.

Casey Newton, a tech editor, said in an interview with NPR that if Facebook faces a lawsuit in December, it will have a harder time buying other companies. Now that investigators are finally aware of the impact companies like Facebook and Google have on the market as tech giants, no matter who ends up in the White House, tech companies will be more tightly regulated over the next four years.

The FTC declined to comment, while Facebook was not immediately available for comment. In addition to New York, other states participating in the investigation include Colorado, Nebraska, Tennessee and Utah, the sources said.

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