US and 48 states and districts sue Facebook in major antitrust actions

[garbon]

https://www.theguardian.com/technology/2020/dec/09/facebook-lawsuit-antitrust-whatsapp-instagram-ftc

The US government and a coalition of 48 states and districts have filed lawsuits against Facebook in a major antitrust offensive on Big Tech.

One lawsuit brings together nearly every state in the US, a coalition led by New York's attorney general, Letitia James. "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," said James in a statement.

"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."

The other lawsuit was brought by the the US Federal Trade Commission (FTC). The FTC said in a statement that it would seek an injunction that "could, among other things: require divestitures of assets, including Instagram and WhatsApp".

At the heart of both antitrust actions is Facebook's dominance of the social media market, and whether the social media giant gobbled up potential competitors that could have eaten into its market share. In particular, investigators have spent months looking into Facebook's acquisition of two big apps: a $1bn deal to buy the photo-sharing app Instagram in 2012, and the $19bn purchase of the global messaging service WhatsApp in 2014. Together, the buys brought the top four social media companies worldwide under Facebook's control.

At the time of its acquisition, Instagram had 30 million users, and, even though it was growing rapidly, it wasn't yet making money. WhatsApp boasted more than 450 million monthly active users when it was acquired. "WhatsApp is on a path to connect 1 billion people," Facebook's CEO, Mark Zuckerberg, said in a statement at the time.

The FTC cleared Facebook for the acquisitions when they occurred, and the company is hoping to leverage those approvals in mounting a defense. Facebook executives have also argued their company has helped the apps grow.

But Facebook has come under greater scrutiny since the deals were done, and the FTC launched a new investigation into the potential antitrust violations in 2019.

[Admiral Yi]

It's a shakedown.  Instagram and Whatsapp were not competitors to Facebook, unless you define social media so broadly it loses any meaning.  Is email social media?  Texting, voice calls, snail mail?

[garbon]

That doesn't appear to be facebook's position. Also, how is Instagram not social media?

https://www.politico.com/news/2020/12/09/states-ftc-suing-facebook-for-alleged-antitrust-abuses-443957

...

Both complaints rely heavily on communications among Zuckerberg and other Facebook executives, with the states referring to him by name 64 times and the FTC about 40. The FTC, in particular, cites a 2008 Zuckerberg e-mail as the company's overarching philosophy: "it is better to buy than compete."

The FTC looked into Facebook's $1 billion Instagram purchase and $19 billion WhatsApp deal at the time but didn't oppose the deals. However, recently disclosed internal communications show that Zuckerberg and other senior Facebook executives had pushed the details to neutralize a competitive threat to the social network, House Judiciary Committee investigators reported in October.

The messages included e-mails in which Zuckerberg described the Instagram purchase as "insurance" to protect Facebook's main product, saying the company "can likely always just buy any competitive startups."

In internal conversations about the WhatsApp deal, Facebook executives said the merger was needed to "shore up our position" and keep the smaller company from gaining more traction than Facebook Messenger.

"I hate the word 'land grab' but I think that is the best convincing argument," the report quoted a Facebook executive as saying in support of the WhatsApp deal.

...

[The Minsky Moment]

It's a shakedown.  Instagram and Whatsapp were not competitors to Facebook, unless you define social media so broadly it loses any meaning.  Is email social media?  Texting, voice calls, snail mail?

That is a very tricky position for Facebook to take and legally could be counterproductive.  A defendant in an AT case usually wants to broaden the scope of the relevant market as much as possible to make it look more competitive.  On your narrower view, Facebook is an existing, entrenched monopoly and thus would be legally subject to the stricter rules of conduct that apply to existing monopolies.  In that case, the plaintiffs wouldn't necessarily have to prove that Instagram and Whatsapp were direct competitors, only that they had the potential to grow into competitors and Facebook acquired them with the intent to snuff out that potential.

[The Brain]

The FTC cleared Facebook for the acquisitions when they occurred

Are they admitting wrongdoing?

[The Minsky Moment]

The real moral of the story for the millionth time is to be a lot more careful what you say in email.

[The Minsky Moment]

The FTC cleared Facebook for the acquisitions when they occurred

Are they admitting wrongdoing?

Cleared as in the FTC didn't attempt to block the deals.

[The Brain]

The FTC cleared Facebook for the acquisitions when they occurred

Are they admitting wrongdoing?

Cleared as in the FTC didn't attempt to block the deals.

Yes?

[Admiral Yi]

That is a very tricky position for Facebook to take and legally could be counterproductive.  A defendant in an AT case usually wants to broaden the scope of the relevant market as much as possible to make it look more competitive.  On your narrower view, Facebook is an existing, entrenched monopoly and thus would be legally subject to the stricter rules of conduct that apply to existing monopolies.  In that case, the plaintiffs wouldn't necessarily have to prove that Instagram and Whatsapp were direct competitors, only that they had the potential to grow into competitors and Facebook acquired them with the intent to snuff out that potential.

If Instagram and Whatsapp had the potential to grow into competitors of Facebook, anything you do on on your phone or computer has the potential to grow into a competitor of Facebook, and Facebook is not so "entrenched."

[alfred russel]

The real moral of the story for the millionth time is to be a lot more careful what you say in email.

I checked my email outbox and have 23,773 emails I've sent dating back to mid 2015. The number should probably be a lot higher but I get distracted with stuff like languish. The reality is that there is such a large volume of email activity going through large companies that you can use emails to prove almost anything you want.

[Barrister]

The real moral of the story for the millionth time is to be a lot more careful what you say in email.

I checked my email outbox and have 23,773 emails I've sent dating back to mid 2015. The number should probably be a lot higher but I get distracted with stuff like languish. The reality is that there is such a large volume of email activity going through large companies that you can use emails to prove almost anything you want.

I looked it up - I have 57,000 emails going back to 2011.

[Eddie Teach]

Holy shit.

[mongers]

The real moral of the story for the millionth time is to be a lot more careful what you say in email.

I checked my email outbox and have 23,773 emails I've sent dating back to mid 2015. The number should probably be a lot higher but I get distracted with stuff like languish. The reality is that there is such a large volume of email activity going through large companies that you can use emails to prove almost anything you want.

I looked it up - I have 57,000 emails going back to 2011.

39.324 dating back to 2001; I need to clear that out.

[DGuller]

The real moral of the story for the millionth time is to be a lot more careful what you say in email.

I checked my email outbox and have 23,773 emails I've sent dating back to mid 2015. The number should probably be a lot higher but I get distracted with stuff like languish. The reality is that there is such a large volume of email activity going through large companies that you can use emails to prove almost anything you want.

Yeah, I always wonder to what extent these e-mails are cherrypicked to fit the narrative.  If you send enough e-mails, there will always be some that won't sound good when taken out of context (which at the time may have been established outside of e-mails). 

Is everyone supposed to write like Tony Soprano was talking, just to preemptively avoid such a situation?  You may have an easier time during a lawsuit, but you'll have a harder time doing actual business efficiently.

[Grey Fox]

It's a shakedown.  Instagram and Whatsapp were not competitors to Facebook, unless you define social media so broadly it loses any meaning.  Is email social media?  Texting, voice calls, snail mail?

Instagram was exactly like FB with a limit of only having picture posts.