The parallel lawsuits, months in the making, represent an unprecedented challenge to one of Silicon Valley’s most powerful corporations. The complaints zero in on Facebook’s acquisition and control over Instagram and WhatsApp, two key services in its social media empire.
The suits come roughly 14 months after New York Attorney General Letitia James announced that her office was leading a group of attorneys general in investigating Facebook for potential anticompetitive practices. More than 40 attorneys general ultimately signed onto Wednesday’s complaint. The Federal Trade Commission, meanwhile, has been conducting its own antitrust investigation of Facebook since June 2019.
Much of the scrutiny of Facebook concerns the companies it has purchased to build up a massive audience that now totals more than 3 billion users across its portfolio of apps, according to its financial statements. That dominance has raised questions by some legal experts, including US lawmakers, about whether Facebook CEO Mark Zuckerberg set out to neutralize competitive threats by gobbling them up.
As the drumbeat in Washington against Facebook has grown louder, the company has had years to prepare for a showdown. It’s moved to tightly integrate its apps on a technical level, a decision some critics have suggested is a strategy to frustrate any potential breakup. It’s stepped up its hiring of lawyers with antitrust and litigation experience. And the company has fine-tuned its talking points, settling on a narrative that Facebook welcomes regulation but that cracking down too hard could risk giving other countries like China a competitive edge in the fast-moving technology sector.
The company has also argued that regulators reviewed the WhatsApp and Instagram deals at the time and did not see a reason to block them then. Instagram was acquired particularly early on in its lifecycle, before many came to view it as the successful giant it is today.
Wednesday’s legal action makes Facebook the second global tech company to be taken to court by US and state government officials this year over antitrust concerns. In October, the Justice Department and 11 states filed a lawsuit against Google, alleging that it had stifled competition to maintain its powerful place in online search and search advertising. (Google has called the suit “deeply flawed” and that consumers use Google’s platform because they choose to, not because they are forced to.) The last major tech antitrust suit before that, experts say, dates back to the US government’s landmark case against Microsoft in the late 1990s and early 2000s.
Facebook and Google aren’t the only tech companies of concern among policymakers. US officials have increasingly probed the entire tech sector for potential anticompetitive behavior, giving particular focus to the big four firms that now touch every corner of our lives. The scrutiny has ranged from Apple’s control over the iOS app ecosystem to Amazon’s treatment of independent sellers on its e-commerce platform.