By Delphine Luneau | The Center Square
Credit: Tom Sofield/LevittownNow.com
Pennsylvania Attorney General Josh Shapiro joined a coalition of 47 other state attorneys general and the Federal Trade Commission on Wednesday to sue social media giant Facebook, alleging that the company had engaged in a pattern of monopolistic practices.
Advertisements
The lawsuit, filed in the U.S. District Court for the District of Columbia, accuses the company of squashing competition through acquisitions of rival companies and measures intended to destroy other companies.
“We’re alleging that Facebook built a monopoly that, as we speak, is doing all it can to stifle competition, including local media, prey on smaller companies, and punish anyone it can’t buy through cutting off access to services and information,” Shapiro said in a news release.
The lawsuit asks the court to restrict Facebook from making acquisitions of other companies valued at more than $10 million without advance approval from the states. It also asks the court for “additional relief it determines is appropriate, including the divestiture or restructuring of illegally acquired companies, or current Facebook assets or business lines.”
Advertisements
Facebook, in a statement posted to Twitter, argued that all of its acquisitions had already been subject to government review.
“Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day,” the company wrote.
Advertisements
The news release from Shapiro’s office alleges that the company violated the Sherman Antitrust Act and the Clayton Act through its purchases of rival companies, including Instagram and WhatsApp.
“Facebook targets competitors with a ‘buy or bury’ approach: if they refuse to be bought out, Facebook tries to squeeze every bit of oxygen out of the room for these companies,” the news release stated. “To facilitate this goal, Facebook has used an “open first–closed later” strategy to stop competitive threats, or deter them from competing, at the inception.”
The latter strategy consisted of opening the platform to outside companies, the attorney general alleged, only to revoke that open access without warning after the third-party companies had become dependent on the revenue they were receiving, putting their businesses in jeopardy.
Advertisements
“This is not how normal businesses operate; it is how illegal monopolies operate,” Shapiro said. “They are breaking the law and we’re going to stop them in court.”
Report a correction via email | Editorial standards and policies
