It’s an antitrust case, and people have known this was coming for a very long time. One of the reasons Facebook has become the monopoly it is has been that every time somebody builds an app that could be a viable competitor they’ll come in and buy up that app. The two most prominent examples of that are Instagram and WhatsApp, but there are lots of others you’ve never heard of that Facebook snapped up before they even hit the market.
Given that Facebook has become far bigger than Ma Bell or Standard Oil could ever had dreamed, it was a matter of time before somebody did something to put a stop to Mark Zuckerberg’s abusive, monopolistic practices. And now 46 states, the District of Columbia and Guam have jumped in.
Dozens of states and federal antitrust authorities filed antitrust lawsuits Wednesday claiming Facebook is illegally squashed competitors and buying up-and-coming social media platforms to secure its online dominance.
New York Attorney General Tish James announced the lawsuit brought by 48 states and district, in a virtual news conference.
“It’s really critically important that we block this predatory acquisition of companies and that we restore confidence to the market,” Tish said.
The Federal Trade Commission filled a separate suit Wednesday in federal court also asked for Facebook to be ordered to divest its Instagram and WhatsApp messaging services and arguing that the social media giant is abusing its market power in social networking to crush smaller competitors.
The FTC is seeking the separation of the services from Facebook, saying the platform has engaged in a “systematic strategy” to eliminate its competition – including by purchasing smaller, burgeoning rivals like Instagram in 2012 and WhatsApp in 2014.
James made similar arguments in her press conference, saying Facebook “used its monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” according to the Associated Press.
Facebook is the world’s biggest social network with 2.7 billion users and a nearly $800 billion market value.
Company CEO Mark Zuckerberg is the world’s fifth-richest person and was a pioneer in the social media industry.
James alleged Facebook had a practice of opening its site to third-party app developers, then abruptly cutting off developers that it saw as a threat.
One of the states involved in the suit is Louisiana. Attorney General Jeff Landry has been spoiling for a fight with Facebook for some time, and recently Landry went to war with Zuckerberg over a $400 million donation the tech mogul and his wife Priscilla Chan made to an outfit called the Center for Tech and Civic Life which essentially destroyed election integrity in the six disputed states by supplying funds to turn local elections officials into Democrat get-out-the-vote agents. Landry sued over grants that had been offered to those officials in several Louisiana parishes, and supported a bill by Rep. Blake Miguez to make such activity illegal. The grants were not made in Louisiana as a result.
Here was the press release put out by Landry’s office…
Louisiana Attorney General Jeff Landry today joined a bipartisan coalition of 48 attorneys general in filing a lawsuit against Facebook Inc., alleging that the company has and continues today to illegally stifle competition to protect its monopoly power.
The lawsuit alleges that, over the last decade, the social networking giant illegally acquired competitors in a predatory manner and cut services to smaller threats, depriving users from the benefits of competition and reducing privacy protections and services along the way – all in an effort to boost its bottom line through increased advertising revenue.
“Facebook has thwarted competition and reduced consumer privacy to increase their profits,” said AG Jeff Landry. “This big tech giant has leveraged their monopolist power to extract more lucrative advertising fees while consistency undermining and abusing user trust.”
Since 2004, Facebook has operated as a personal social networking service that facilitates sharing content online without charging users a monetary fee, but, instead, provides these services in exchange for a user’s time, attention, and personal data. Facebook then monetizes its business by selling advertising to firms that attach immense value to the user engagement and highly targeted advertising that Facebook can deliver due to the vast trove of data it collects on users, their friends, and their interests.
In an effort to maintain its market dominance in social networking, Facebook employs a variety of methods to impede competing services and – as Chairman, Chief Executive Officer, and controlling shareholder Mark Zuckerberg has stated – to “build a competitive moat” around the company. The two most utilized strategies have been to acquire smaller rivals and potential rivals before they could threaten Facebook’s dominance and to suffocate and squash third-party developers that Facebook invited to utilize its platform – allowing Facebook to maintain its monopoly over the social networking market and make billions from advertising. As one market participant noted, if an application (app) encroached on Facebook’s turf or didn’t consider selling, Zuckerberg would go into “destroy mode,” subjecting small businesses to the “wrath of Mark.”
Usually these cases are settled before they reach a verdict, and that’s likely here. But we hope there isn’t a settlement. After the way Zuckerberg and his censorious platform have behaved in 2020, we would strongly prefer to see this suit ultimately break Facebook into as many pieces as possible.