VA, DC Join Lawsuit Accusing Facebook Of Creating Monopoly

WASHINGTON, DC — The Federal Trade Commission, with bipartisan support from attorneys general in Virginia, the District of Columbia and dozens of others, filed an antitrust lawsuit in federal court Wednesday against social media giant Facebook.

In the suit, the FTC accuses the company of illegally dominating the social media industry and eliminating business threats through years of monopolization and anti-competitive conduct.

“Facebook has an unprecedented influence in so many facets of the economy, the political process, and even Virginians’ lives and it’s so important to make sure they are acting above board,” said Virginia Attorney General Mark Herring in a statement. “Massive tech and social networking companies like Facebook are not above the law and must comply with antitrust laws and consumer protection laws. My colleagues and I are committed to ensuring that Facebook complies with the law and meets its obligations as one of the most influential companies in the world.”

“Our bipartisan investigation has revealed that Facebook cemented its market dominance by stifling competition and unlawfully eliminating would-be competitors, thereby, depriving consumers of choice and reducing quality and privacy on its platform,” said DC Attorney General Karl Racine. “State Attorneys General across the country are sending a clear message: we will investigate and take action when we find evidence that market-dominant companies, such as Facebook, have used their power to unlawfully enrich themselves at the expense of consumers and competition.”

According to the complaint, Facebook has used a “systematic strategy” over the years to eliminate threats to its business. This includes the company’s acquisition of Instagram in 2012 and mobile messaging app WhatsApp in 2014, both of which were perceived as an “existential threat to Facebook’s monopoly power.”

The lawsuit also alleges Facebook has limited third-party software developers’ access to interconnections to its platform, allowing access only after developers “refrain from developing competing functionalities, and from connecting with or promoting other social networking services.”

As a result of its actions, the lawsuit alleges, Facebook has seen “staggering” profits. Last year, Facebook generated revenues of more than $70 billion and profits of more than $18.5 billion.

The complaint states that Facebook’s actions have not only harmed competition but also left consumers with few choices for personal social networking and deprived advertisers of the benefits of competition.

With the suit, the FTC is seeking an injunction in federal court that could require Facebook to divest its assets, including Instagram and WhatsApp, and require Facebook to seek prior approval for future mergers and acquisitions.

“Personal social networking is central to the lives of millions of Americans,” Ian Conner, director of the FTC’s Bureau of Competition, said in a release. “Our aim is to roll back Facebook’s anti-competitive conduct and restore competition so that innovation and free competition can thrive.”

The lawsuit was filed following an investigation by the FTC’s Technology Enforcement Division.

Attorneys general from 46 states, the District of Columbia and Guam comprise the bipartisan coalition that signed on in support of the lawsuit.