NEWS10 December 2020

Facebook facing antitrust lawsuits

Legal News North America

US – The Federal Trade Commission (FTC) and a group of states have sued Facebook, accusing the company of monopolistic business practices in two lawsuits.

Person holding phone with Facebook login screen

Both complaints, filed yesterday ( 9th December) focus on Facebook’s acquisitions of photo app Instagram and messaging platform WhatsApp in 2012 and 2014 respectively.

The FTC is seeking a permanent injunction in federal court that could require Facebook to divest assets including Instagram and WhatsApp. Such a move would effectively break up the company as it currently stands.

A permanent injunction could also require Facebook to seek prior notice and approval for any future mergers and acquisitions.

Ian Conner, director of the FTC’s bureau of competition, said: “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

The lawsuit follows the FTC’s investigation of Facebook, which began in June 2019.

The investigation was conducted in cooperation with a coalition of attorneys general of 46 states, the District of Columbia and the territory of Guam, who have issued a separate lawsuit.

The state lawsuit calls for Facebook to be required to notify states of any future acquisitions valued at or in excess of $10m.

Jennifer Newstead, vice-president and general counsel at Facebook, said: “Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses.” 

Newstead added: “The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago. The government now wants a do-over, sending a chilling warning to American business that no sale is ever final.”