Facebook faces antitrust lawsuits in the US

Timothy CowenPartner, Preiskel & Co LLP

On 9 December 2020, two antitrust suits were filed in the US by the Federal Trade Commission (“FTC”) and 48 state attorneys general against Facebook.

It is understood that the attorneys general case is being led by the New York attorney general.

The cases allege that Facebook conducted a series of anticompetitive acquisitions, and engaged in exclusionary strategies, to cement its social media monopoly.

It is reported that Facebook’s acquisitions of WhatsApp in 2014 and Instagram in 2012 are included in the cases. In particular, the FTC is calling for the divestiture of certain assets, including Instagram and WhatsApp, an order prohibiting Facebook from imposing anticompetitive terms on software developers, and a requirement for prior notification and scrutiny of future mergers.

The FTC has also indicated that the harm to consumers will be based upon harm to consumer privacy, rather than price or other more conventional harms. The idea of data, rather than price, being a measure of consumer harm has been discussed in competition law circles; its use here could make these suits seminal cases, with implications for a range of other digital businesses. The cases are certainly ones to watch..

Facebook has released a statement in reaction to the cases, which can be read here.

The cases come after 2019 announcements by the FTC and a number of attorneys general that they were investigating the social media company.

Please contact Tim Cowen if you have any questions about the Facebook lawsuits, or competition law in general.

Contributing Advisors

Stephen HornsbySenior Consultant, Preiskel & Co LLP