Facebook probe in final stages as FTC, US states prepare lawsuits

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The Federal Trade Commission along with a bipartisan group of dozens of state attorneys general are at the final stages of submitting one or more significant antitrust complaints against Facebook Inc in early December, according to four sources knowledgeable about this circumstance.

FTC staff undertaking a investigation of the company has advocated to commissioners that they sue the social networking company in federal court, which might permit the group of states, headed by New York, to join the litigation, according to a source.

As many as 41 states may sign on to the suit, three sources said. The filing of the lawsuit or lawsuits could slip into next year, the sources said.

The FTC and countries have yet to finalize how they might file any suits. The FTC could file to some district court while the states file their complaint individually; the FTC can file to an administrative law judge and conditions can file in district court, or they can combine forces and sue collectively in district court, two sources said.

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States discussed the issue during a call on Wednesday, two sources said.

FTC commissioners could make a decision as early as Friday, when a meeting is scheduled. Contrary to the Justice Department, which typically gets new leaders using a brand new US president, the FTC commissioners’ terms are untouched by Inauguration Day in January.

The FTC declined comment while Facebook couldn’t immediately be reached for comment.

In addition to New York, other lead nations on the investigation include Colorado, Nebraska, Tennessee and Utah, one of the sources said.

The legal action is expected to focus on Facebook’s alleged violations of antitrust legislation to protect its colossal market share in social networking.

The FTC and states have converged on similar accusations, however what they will allege in court has not been finalized, among the sources briefed on the talks said. They assert Facebook stifled competition with its $1 billion acquisition of the image-sharing app Instagram in 2012, weakened privacy protections in the encrypted messaging app WhatsApp after obtaining it for $22 billion in 2014 and selectively squashed rivals by refusing to discuss user data, the source stated.

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States are not expected to list certain treatments in their litigation, the source added.

Start-up investors, antitrust experts and privacy activists have criticized the FTC for its approvals of their Instagram and WhatsApp purchases.

A comprehensive report from the House of Representatives Judiciary Committee of the four Big Tech companies this year discovered that Facebook used its own access to superior market information to identify forthcoming competitive threats so those companies may be copied, purchased or choked off by restricting access to Facebook data.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Diane Bartz in Washington and Paresh Dave in Oakland. Additional reporting by David Shepardson in Washington. Editing by Matthew Lewis.

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