What happened: The Federal Trade Commission has filed a antitrust lawsuit against Facebook for its “anti-competitive behavior and unfair competitive methods”. This includes the acquisition of Instagram in 2012 and the acquisition of WhatsApp in 2014. Facebook, according to the FTC, has a monopoly on social media.
“Since overthrowing its first rival MySpace and achieving monopoly power, Facebook has turned to defense through anti-competitive means,” the FTC wrote in its lawsuit. “After identifying two significant competitive threats to its dominant position – Instagram and WhatsApp – Facebook decided to stifle these threats by buying the companies, reflecting the view of CEO Mark Zuckerberg, expressed in a 2008 email, according to which “it is better to buy than to compete”. “
How we got here: Facebook has been under increased regulatory scrutiny in the United States since 2017, when press reports revealed that political data firm Cambridge Analytica had collected data from Facebook users without consent in the run-up to it. 2016 US presidential election.
The FTC began its investigation into Facebook’s privacy policies in March 2018, which resulted in a $ 5 billion fine. While this was the biggest fine ever for a tech company, it still only accounted for around 9% of the company’s revenue in 2018 – and was strongly criticized by advocacy organizations and Democratic lawmakers because it did not come with terms requiring Facebook to change its business practices.
In recent months, surveillance has intensified. Over the summer, House Democrats published a 449-page article report on the monopoly practices of Apple, Amazon, Facebook and Google, arguing for increased enforcement of antitrust laws.
Then, in October, the Ministry of Justice filed an antitrust complaint against Google, claiming that the company used illegal methods to expand its research and advertising business.
Why is this important: The DoJ’s lawsuit against Google was already the largest monopoly case filed in 20 years, and the twin FTC and state lawsuits are, at the very least, tied.
Today’s action, which joined a separate trial from 47 US states as well as Guam and the District of Columbia, has a big impact on Facebook and could force it to sell Instagram and Whatsapp. But it also portends a broader environment that increasingly criticizes the dominance of a handful of tech giants.
It could take years for these cases to go to court, but new prosecutions are underway. State attorneys general have said they will file their own lawsuits against Google in the coming weeks, along with continued further scrutiny of Amazon and Apple.