A group of U.S. states led by New York is investigating Facebook Inc for possible antitrust violations and plans to file a lawsuit against the Silicon Valley behemoth as early as next week, four sources familiar with the matter said on Wednesday.
The complaint would be the second major lawsuit filed against a Big Tech company this year. The Justice Department sued Alphabet Inc’s Google in October for maintaining an “illegal monopoly” in online search and advertising.
More than 40 states plan to sign on to the lawsuit, one source said, without naming them.
It is unknown what is planned to go into the complaint, though a common refrain sung against Facebook is its strategic buyouts of likely rivals in the social media space, such as its 2012 buyout of Instagram or its 2014 purchase of WhatsApp.
In particular, investigators are looking at whether Facebook has left consumers with worse services and fewer privacy protections than if Whatsapp and Instagram had not been bought and remained independent.
Facebook Chief Executive Mark Zuckerberg has argued in congressional testimony that the company has a range of competitors, including other tech giants. According to him, the popularity of TikTok is proof there is a competition social media market. He has defended controversial acquisitions like Instagram and WhatsApp by saying the social media platform helped them expand from small, insignificant companies into powerhouses.
The Justice Department and FTC in 2019 began antitrust investigations into the four big tech companies, which also include Amazon.com Inc and Apple Inc. Shortly after that, attorneys generals quickly joined together to probe Google and Facebook.
This is not the first time that Facebook has been targeted for potential antitrust violations. The current antitrust investigation was first announced last year, with New York Attorney General Letitia James explaining at the time that the state attorneys general were probing whether Facebook had “endangered consumer data, reduced the quality of consumers’ choices or increased the price of advertising.”
Sen. Elizabeth Warren, D-Mass., responded to that antitrust investigation news by linking it to the Justice Department and FTC probes, pointing out that “if my plan to tax excessive lobbying had been in place during that time, Facebook would’ve paid $39 million in taxes—money that could’ve been directed to the FTC’s antitrust efforts.”
Facebook has moreover been in news lately because of being accused of spying on users via Instagram, being fined by South Korea for Sharing Personal Information and also criticised for asking the content moderators at Facebook to come to work during the pandemic.
If events take place as reported until now, then this lawsuit would be the first antitrust case against Facebook in the US.
That said, it may be the start of more cases to come.
The Wall Street Journal on November 30 said federal and state authorities are looking to prepare as many as 4 additional cases against either Google, Facebook, or both companies by the end of January 2021.
Facebook did not comment. A spokesman for the New York attorney general’s office said to be leading the charge against Facebook, also declined to comment.