New York and dozens of other states are poised to sue Facebook for alleged antitrust violations as early as Wednesday, in a major escalation of a growing bipartisan fight to rein in the wealth and power of Silicon Valley’s giants, a person familiar with the case told POLITICO.
The suit, which could lead to the first court-ordered breakup of a major U.S. company in decades, is expected to allege that the world’s largest social network website sought to keep its monopoly by buying up potential rivals such as WhatsApp and Instagram before they could gain a foothold, two other people informed about the case said, requesting anonymity because the case is not yet public. It would also accuse Facebook of undercutting other competitors by restricting their access to its data.
A Facebook spokesperson declined to comment. The person familiar with the states’ planned lawsuit said it could also be pushed back to Thursday.
The states’ case would come as the Federal Trade Commission is expected to vote as early as Wednesday on its own antitrust suit against Facebook, another person familiar with that case said. The FTC suit could be filed as soon as Wednesday afternoon and is likely to be filed in Washington, D.C., federal court, the person said.
In late October, the Justice Department and 11 states’ attorneys general filed a separate antitrust case against Google, which also faces other state and DOJ lawsuits expected to land in the coming weeks and months.
The suits, following years of grumbling in the U.S., Europe and elsewhere about giant tech companies’ dominance, are finally arriving in the twilight of Donald 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.
POLITICO reported Monday that the states, led by New York Attorney General Tish James, and the FTC were likely to sue Facebook this week. The Washington Post reported Tuesday night that the suits are expected to come Wednesday.
Facebook’s market power: A House investigation into Facebook earlier this year found the company has a monopoly in social networking, which it has maintained by copying, acquiring or killing off potential rivals. While the U.S. and foreign competition authorities looked into some of the company’s most problematic acquisitions when Facebook announced them — such as its 2012 purchase of photo-sharing app Instagram and the 2014 purchase of messaging service WhatsApp — those truncated reviews didn’t fully appreciate Facebook’s deals as efforts to head off potential competitors.
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.
The investigations: James said in September 2019 she was leading a multistate coalition investigating Facebook, which has roughly 2.74 billion users worldwide and whose CEO, Mark Zuckerberg, ranks fifth on Forbes’ list of the world’s richest billionaires.
The FTC, one of the United States’ two federal antitrust agencies, opened a probe into Facebook in July 2019 after the agency, which also enforces consumer protection laws, finished an investigation into the Cambridge Analytica data breach. Facebook paid $5 billion in penalties and agreed to an internal restructuring to resolve that privacy probe with the FTC. But Democrats on the commission, and consumer advocates outside the agency, said the settlement went easy on the company.