Facebook is officially being sued by the United States Government including the FTC and a coalition of 48 states being led by New York’s attorney general.
It’s been a rough year for social media. Earlier in the year Facebook, Google, and Twitter CEOs were virtually testified to the senate. At the time, they were all taking part in a hearing that was designed to help congresspeople understand whether or not “Section 230” was overprotecting the tech giants from user-posted content liability. Many in Congress would like to see section 230 repealed or completely changed.
More recently, Trump and various members of Congress have called again for the repeal of section 230. President Trump, who has been vigorously fact-checked for statements he’s made on both Twitter and Facebook, stated publicly on Twitter that he would veto the annual defense spending bill if it did not make cuts to section 230.
The defense bill did pass with a large majority, so it is currently headed to President Trump’s desk. While the defense bill passed with a large majority, it isn’t shielded from being vetoed. If the bill is vetoed, it is unclear where some Republican allegiance lies, which could cause a frenzy if it comes to either overturning President Trump’s veto or voting along Trump’s lines to kill the bill.
Facebook Un-Friended?
While it’s unclear currently what will happen with the defense bill, Facebook is being sued by the FTC as well as a coalition of 48 states over antitrust allegations. It is being claimed that Facebook has violated antitrust regulations by making acquisitions of Instagram and WhatsApp. The suit alleges that Facebook has used their platform, and their data collection methods, to shut down possibilities of growth of the messaging and photo apps respectively by withholding tools and information that could have helped the businesses succeed without being bought.
Though Facebook and Mark Zuckerburg, the CEO, and founder of Facebook, are no strangers to the lawsuits, this is the largest suit either will have faced. This is also the largest tech monopoly suit since 1998 when the U.S. Justice Department sued Microsoft.
Social Money
Facebook’s acquisition of Instagram came in 2012 when they shot other bidders out of the water with an offer of $1 billion dollars. At the time, Instagram was valued at roughly $500 million dollars. Before Facebook, Instagram was largely seen as a camera and photo-sharing application. Later, in 2018, Facebook purchased WhatsApp for $19 billion. In 2017-2018, WhatsApp was suspected to have revenue of around $6 billion of annual profit. WhatsApp was, and is, an encrypted messaging system. Facebook, while interested in social media, is thought to be much more interested in what data they are able to collect from the two platforms than what the platforms actually do.
The Lawsuit and Letitia James
Letitia James, New York Attorney General, is spearheading the fight against Facebook. In a statement made on December 9th James Stated:
“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…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. Instead of competing on the merits, Facebook used its power to suppress competition so it could take advantage of users and make billions by converting personal data into a cash cow. Almost every state in this nation has joined this bipartisan lawsuit because Facebook’s efforts to dominate the market were as illegal as they were harmful. Today’s suit should send a clear message to Facebook and every other company that any efforts to stifle competition, reduce innovation, or cut privacy protections will be met with the full force of our offices.”
The lawsuit seeks to break up the acquisitions of Instagram and Whatapp. It also looks to set new precedents for how tech companies operate including how they handle buyouts and how they handle user data.
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