Led by New York Attorney General Tish James, 46 states and the FTC have just declared war on Facebook with a massive, bipartisan antitrust attack to get the social network to divest itself of Instagram and WhatsApp, among other things.
Federal antitrust authorities and dozens of states launched a double-barreled legal assault on Facebook on Wednesday, in lawsuits that seek to break up the Silicon Valley giant and address years of complaints about its worldwide social networking empire.
Both suits ask a judge to make Facebook spin off its messaging service WhatsApp and photo-sharing app Instagram — two of the world's most popular mobile apps, which it acquired in deals that passed muster with federal regulators less than a decade ago.
Democratic and Republican attorneys general from 48 U.S. states and territories, including New York, are behind one of the suits announced Wednesday. The Federal Trade Commission, filed its own suit Wednesday in U.S. District Court in Washington, D.C.
“No company should have this much unchecked power,” New York Attorney General Tish James said in a news conference announcing the suit, adding that Facebook engaged in a “buy or bury strategy” against potential competitors.
Facebook’s critics in and out of government immediately praised the lawsuit. “Facebook’s reign of unaccountable, abusive practices against consumers, competitors and innovation must end today,” said Sen. Richard Blumenthal (D-Conn.) in a statement. “For too long, Facebook has avoided real competition through anticompetitive acquisitions, unchecked power over consumers, and the failure of federal antitrust enforcers to take action.”
Sen. Josh Hawley (R-Mo.), an ally of President Donald Trump, tweeted: "This is a necessity. The @instagram and WhatsApp mergers with @Facebook were anti-competitive, they were meant to be anti-competitive, and they should be broken up."
Both cases accuse Facebook of illegally using its power for more than a decade to muscle out rivals and snap up rising competitors, specifically including WhatsApp and Instagram, before they could gain a foothold. That spending spree has continued even as Facebook faces rising antitrust scrutiny in the U.S., Europe and Australia — just last month, it said it would buy a customer service startup called Kustomer in a deal that news reports valued at more than $1 billion.
Facebook pushed back on the complaints, noting that antitrust authorities looked at the Instagram and WhatsApp transactions at the time.
“Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day,” the company said in a tweet.
The suits represent the latest escalation of a power struggle between governments around the world and the United States' wealthiest tech companies. The Justice Department and a smaller coalition of GOP-led states lodged a similar antitrust case against Google in October. States and the DOJ are expected to file additional suits against Google in the coming weeks.
The federal cases have landed during the final months of Trump's presidency. President-elect Joe Biden has voiced his own harsh criticisms of Facebook, accusing the company of "propagating falsehoods they know to be false, although his transition team and early personnel picks have drawn scrutiny for their ties to Silicon Valley.
Facebook has denied being a monopoly, noting that it ranks behind Google in how much revenue it claims from the $160 billion global market for online display advertising. CEO Mark Zuckerberg has also portrayed Facebook as a champion of the "American free speech tradition," in contrast with China's vision of a censored internet.
Still, the litigation follows a massive change in the U.S. political fortunes for Facebook and Zuckerberg, who co-founded the company in his Harvard dorm room in 2004 and now ranks fifth on Forbes' list of the world's richest billionaires. Less than a decade ago, Facebook's cachet in D.C. was enough to draw then-President Barack Obama to its California headquarters for a town hall alongside Zuckerberg. Now, political leaders in both parties say the company's unchecked power makes it a threat to rivals and countless Americans.
I have to say with this level of near-universal condemnation of Facebook, Zuckerberg's days are clearly numbered, but those days could still be well into the hundreds, if not thousands. Facebook is big enough to fight back for years and anything will almost certainly go to SCOTUS.
And for the record, Guam and DC are joining in, but South Carolina, South Dakota, Alabama, and Georgia, all states with GOP attorneys general, are not. Even California and Washington state are joining this suit, which should really, really tell you that Zuck is, well, good and Zucked.
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