California Joins Lawsuit Against Facebook For Predatory, Monopolistic Behavior
SACRAMENTO (CBS SF) -- California Attorney General Xavier Becerra on Wednesday announced that the state has joined a lawsuit against Facebook for allegedly violating federal antitrust laws by purchasing emerging competitors to maintain a monopoly.
According to a press release issued by Becerra's office, the tech giant's acquisition of social media photo app Instagram in 2012 and messaging service WhatsApp in 2014 left users with fewer social networking options, reduced the quality and variety of privacy safeguards and increased user-facing advertisements.
The lawsuit has been filed in parallel with a similar suit from the Federal Trade Commission and requests an injunction to stop Facebook from engaging in further anticompetitive conduct. It also requires that Facebook give states advance notice of certain mergers and acquisitions.
"Anticompetitive behavior harms the market, whether that is a market for health care, telecommunications, or social networking. Facebook leveraged its market power to squash competition and monopolize the market, enabling greater collection and control of data and squandering innovation," Becerra said in the release. "Rather than outcompete or outperform, Facebook simply bought the competition. Innovation in Silicon Valley and elsewhere depends on a fair and competitive marketplace. California consumers deserve options – not oppressive monopolistic behavior."
According to the release, the attorneys general argue that Facebook's $1 billion purchase of Instagram and $19 billion purchase of WhatsApp helped the social media giant maintain monopoly power. Emails and testimony from Facebook executives indicate that the company purchased Instagram and WhatsApp to prevent a migration of their users onto those competing platforms.
Aided by data obtained through another acquisition, Facebook monitored the projected growth of many competing applications and purchased those it believed posed threats. Without competition, Facebook's market dominance gives it wide latitude to set the terms for how user data is collected, used and protected.
Facebook released a statement in response to the new lawsuits filed Wednesday evening.
"This is revisionist history. Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses," said Facebook Vice President and General Counsel Jennifer Newstead. "Instagram and WhatsApp became the incredible products they are today because Facebook invested billions of dollars, and years of innovation and expertise, to develop new features and better experiences for the millions who enjoy those products."
Newstead also wrote an article posted on the Facebook newsroom website regarding the lawsuits.
Becerra's office has taken multiple actions against Facebook. In August, he joined multiple attorneys general in demanding the company take additional steps to curb the online spread of hate and disinformation. In October, Attorney General Becerra petitioned the U.S. Supreme Court to stop Facebook and others from harassing consumers with robocalling and robotexting.
