In a sweeping move on Wednesday, The Federal Trade Commission and 48 states filed multiple antitrust lawsuits against Facebook. Following an 18-month-long investigation by federal and state regulators into the company’s acquisitions of WhatsApp and Instagram, the suits shine a spotlight on the massive market share enjoyed by the social networking site, which is now valued at $800 billion. “For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” New York Attorney General Letitia James said regarding the lawsuits, the product of a wave of dissatisfaction with Facebook that has grown in strength since 2016.
As The Washington Post notes, the joint lawsuits represent the first major pushback against Facebook’s dominance, “setting the stage for a high-profile clash between U.S. regulators and Silicon Valley that could take years to resolve.” Antitrust regulators had reportedly asked that Facebook sell off WhatsApp and Instagram to help undo the vice grip it has on the digital advertising market. With Mark Zuckerberg at the helm, Facebook has experienced breathtaking success with its purchases of Instagram and WhatsApp in 2012 and 2014, respectively. The lawsuits brought by the FTC, led by Republican Chairman Joe Simons, reportedly allege that Facebook engaged in “illegal monopolization.” (After purchasing the two platforms, Facebook alluded to the possibility of running them independently before pivoting and working to integrate them into the company’s core social-networking framework.)
While people on both sides of the political aisle have voiced concern regarding Facebook’s size and influence, the reasons differ widely. Following hearings early this year, New York Magazine’s Eric Levitz noted that while Republicans expressed a vague interest in the issue of Facebook’s monopoly, they were much more concerned with the company’s alleged liberal bias. “The GOP’s complaint is not with Big Tech’s vast unaccountable power over our political economy, but only with how it is choosing to wield that power,” Levitz wrote, adding that the party was “nevertheless too averse to regulation to legislatively punish Silicon Valley for its supposed treachery.” High profile Democrats including Senator Elizabeth Warren and Congresswoman Alexandria Ocasio-Cortez have been vocal regarding what they believe to be the failures of the site, and President-elect Joe Biden will have to contend with party members who want to see some form of action against big tech.
Social media platforms including Twitter, Youtube, and Google have faced increased scrutiny during the tenure of Donald Trump, who has used them to spread disinformation and at times incite violence. Last summer, Zuckerberg reportedly began meeting privately with conservative pundits, leading critics to echo the fear that Facebook’s monopoly on news and advertising is not only bad for business, but could affect democracy. According to the Post, state and federal investigators alleged in Wednesday’s lawsuits that Facebook’s acquisitions potentially removed two capable rivals from the digital marketplace—a charge the company has denied, holding that Instagram and WhatsApp have only grown more successful because of Facebook’s investment.
In reaction to the lawsuits, Jennifer Newstead, vice president and general counsel at Facebook, said in a statement, “This is revisionist history. Antitrust laws exist to protect consumers and promote innovation, not to punish successful companies.” Newstead also highlighted the fact that the purchases of both Instagram and WhatsApp were approved by the FTC at the time of the sale and added that “The government now wants a do-over, sending a chilling warning to American businesses that no sale is ever final.” Zuckerberg has come off as fatalistic when asked to envision Facebook without two of its biggest acquisitions, calling the possibility of the company’s break-up an “existential” threat.
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