November 23, 2020
Sources said that state and federal investigators plan to bring antitrust charges against Facebook, with a focus on whether its acquisitions of Instagram and WhatsApp created an anticompetitive environment. Investigators examined how Instagram and WhatsApp changed after they were acquired and whether customers had fewer privacy protections. When Facebook purchased WhatsApp in 2014, it vowed to customers and regulators to preserve its strong privacy protections, but later tried to integrate user data into its other services.
The Washington Post reports that, according to the same three sources, “state and federal lawsuits have not been finalized, meaning that investigators could still alter their thinking, potentially to maximize their potency in court.” But, led by New York State Attorney General Letitia James, she and two other state attorneys general “are on track to file a lawsuit in early December … [and] nearly 40 states, led by Democratic and Republican enforcers, have expressed an interest in signing onto the case.”
The Federal Trade Commission, also nearing the end of its investigation, “has sought to coordinate with state leaders,” although it must vote to actually file a lawsuit.
In the face of this opposition, Facebook is lobbying in public and in private, and chief executive Mark Zuckerberg and his colleagues “have pointed to the arrival of new, fast-growing social apps — including TikTok — as evidence of a healthy, competitive social networking market.” Zuckerberg has more than once pledged to fight any antitrust case. He was quoted that, although he didn’t want a major lawsuit “against our own government … at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight.”
WaPo says that, “no matter its scope, an antitrust lawsuit is sure to touch off a long battle between Facebook and government regulators,” similar to Microsoft’s ten-year battle with the government. Last month, the Justice Department sued Google over the identical issue of anticompetition. It adds that, “the government appears to be setting the stage for a fight that could eventually lead to a breakup of the tech behemoth or perhaps a slate of new, strict conditions on its business operations.”
In addition to the state attorneys general probe, Facebook was fined $5 billion by the FTC and it also faces “a third inquiry on Capitol Hill, where lawmakers led by David Cicilline (D-Rhode Island) this fall sought to shed fresh light on Facebook’s tactics as part of a wider look at Big Tech.” This latter investigation “unearthed a trove of emails from Zuckerberg and his lieutenants apparently plotting against competitors, a series of discussions in which they reference making a ‘land grab’ targeting rival apps.”