WASHINGTON – Pennsylvania Attorney General Josh Shapiro is among 48 such officials who have filed an antitrust lawsuit against social media giant Facebook, alleging it has created a monopoly through using its large market share to eliminate its business rivals.
The antitrust lawsuit was first announced Wednesday by the Federal Trade Commission and New York Attorney General Letitia James.
“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,” James said.
“Almost every state in this nation has joined this bipartisan lawsuit because Facebook’s efforts to dominate the market were as illegal as they were harmful. Today’s suit should send a clear message to Facebook and every other company that any efforts to stifle competition, reduce innovation, or cut privacy protections will be met with the full force of our offices.”
The suit accuses Facebook of executing “a systematic strategy” to eliminate its competition through anti-competitive conduct, with an example being its billion-dollar purchases of then-nascent social media apps Instagram in 2012 and WhatsApp in 2014.
Though CEO Mark Zuckerberg maintained Instagram and WhatsApp would be maintained separately from Facebook upon their acquisitions, the apps have become increasingly integrated in recent years.
Meanwhile, the FTC also brought legal action against Facebook on Wednesday, seeking a forced divestment of those same Instagram and WhatsApp messaging services.
Shapiro said that Facebook’s myriad of illegal actions in creating a monopoly are what landed it in legal hot water.
“This lawsuit is straightforward. We’re alleging that Facebook built a monopoly that, as we speak, is doing all it can to stifle competition, including local media, prey on smaller companies, and punish anyone it can’t buy through cutting off access to services and information,” Shapiro said.
“This is not how normal businesses operate; it is how illegal monopolies operate. They are breaking the law and we’re going to stop them in court.”
Since its debut in 2004, Facebook has become the world’s largest social media network, touting 2.7 billion users and a market value of nearly $800 billion. Its CEO, Zuckerberg, is the fifth-richest individual in the world.
The lawsuit – brought by the attorneys general of 46 states, Guam and the District of Columbia – also accuses Facebook of using its gigantic market share to acquire consumer data, make a fortune in advertising revenues and of violating both the Sherman Act and Clayton Act.
The bipartisan coalition of 48 attorneys general collaborated with the FTC in preparing its lawsuit, according to James, but conducted its investigation separately.
Jake Ward, President of the Connected Commerce Council, issued a statement in response to the FTC and state attorneys general lawsuits against Facebook.
“During a national pandemic and economic crisis, misinformed and poorly timed government attacks on American tech innovators will cost small businesses dearly. Digital tools, services, and marketplaces weave a Digital Safety Net that helps millions of small businesses and their communities manage the COVID-19 disruption,” Ward said.
“But with today’s lawsuits, and more lawsuits on the horizon, elected officials are asking small businesses to walk the pandemic tightrope and rebuild our national economy without a net.”
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com