Facebook illegally crushed its competition and continues to do so to this day to maintain its monopoly, according to a lawsuit filed on Wednesday by the attorneys general of no fewer than 46 US states plus Guam and DC.
The lawsuit alleges that the social media 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.”
America’s consumer watchdog the FTC is also suing the antisocial network in a parallel action, and making the same basic allegations: that Facebook has been “illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct.”
It’s been a long time coming but the, as alleged, privacy-invading, competition-crushing Zuckerberg spin machine that is Facebook has finally been taken on by the United States.
The action is being led by New York’s Attorney General Letitia James, and she wasn’t holding back in her declaration of legal war. “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,” she said. “Today, we are taking action to stand up for the millions of consumers and many small businesses that have been harmed by Facebook’s illegal behavior.”
She also highlighted the biggest complaint against Facebook by its users, a complaint that has been commonplace for nearly a decade, that it has made “billions by converting personal data into a cash cow.”
The 123-page lawsuit [PDF] dives into how what was once just a website among many others became an online monster devouring anything in its path. “Facebook illegally maintains that monopoly power by deploying a buy-or-bury strategy that thwarts competition and harms both users and advertisers. Facebook’s illegal course of conduct has been driven, in part, by fear that the company has fallen behind in important new segments and that emerging firms were ‘building networks that were competitive with’ Facebook’s and could be ‘very disruptive to’ the company’s dominance,” the lawsuit stated.
It quotes CEO Mark Zuckerberg directly and notes that the Silicon Valley goliath would ruthlessly buy up companies in order to “build a competitive moat” or “neutralize a competitor” in its bid for dominance. And notes that Facebook has “coupled its acquisition strategy with exclusionary tactics that snuffed out competitive threats and sent the message to technology firms that, in the words of one participant, if you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode’ subjecting your business to the ‘wrath of Mark.’ As a result, Facebook has chilled innovation, deterred investment, and forestalled competition in the markets in which it operates, and it continues to do so.”
The lawsuit is a much tighter and angrier indictment of Facebook than a similar one lodged against Google in October by the Department of Justice. It still relies on traditional antitrust arguments, however, rather than trying to break new ground to deal with the modern internet era.
I have been talking about this since the beginning of 2019 and it’s wonderful to see the tsunami of action happening now