Facebook illegally maintains a monopoly and a breakup is on the table, says FTC lawsuit

The Federal Trade Commission just fired the opening salvo in the war to break up Facebook.

The FTC lawsuit, announced Wednesday, accuses Facebook of "illegally maintaining" its monopoly through, in part, buying up would-be competitors like Instagram and WhatsApp. The complaint has the backing of 46 states' attorneys general, along with those of the District of Columbia and Guam, and pulls no punches in its characterization of Facebook's supposedly illegal anticompetitive practices. In a separate and complimentary lawsuit, also announced Wednesday, the aforementioned coalition of attorneys general make many of the same allegations against the tech giant.

Time and time again, the FTC complaint alleges, Facebook moved to buy up competitors rather than compete on the merits of its own offerings. To drive that point home, the complaint quotes Facebook CEO Mark Zuckerberg as writing in a 2008 email, "it is better to buy than compete."

Notably, the FTC is after more than just a possible disassembling of Facebook. In addition to seeking to break the behemoth down to its constituent parts, the FTC wants a permanent injunction that would "prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions."

We reached out to Facebook for comment, and a company spokesperson forwarded the following statement from Jennifer Newstead, a Facebook vice president and general counsel.

"The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it cleared these acquisitions years ago," reads the statement in part. "The government now wants a do-over, sending a chilling warning to American business that no sale is ever final."

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Before Wednesday, we'd already seen how Zuckerberg responded in public when pressed as to the possible monopoly status of his company: Essentially, look elsewhere, please.

"The fastest-growing app is TikTok," he told Congress in July. "The most popular app for video is YouTube."

The FTC, it seems, didn't buy that particular line of argument.

"In an effort to preserve its monopoly in the provision of personal social networking, Facebook has, for many years, continued to engage in a course of anticompetitive conduct with the aim of suppressing, neutralizing, and deterring serious competitive threats to [the main Facebook service] Facebook Blue," reads the complaint.

Importantly, the FTC's beef with Facebook extends way beyond simply what possibly competing tech companies it decided to swallow whole. The press release accompanying the complaint notes that Facebook actively sought to harm developers it couldn't peer pressure or buy — competitors, it notes, like Vine.

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"For example, in 2013, Twitter launched the app Vine, which allowed users to shoot and share short video segments," reads the release. "In response, according to the complaint, Facebook shut down the API that would have allowed Vine to access friends via Facebook."

Facebook will certainly fight back hard against these charges both in the courtroom and the sphere of public opinion. Expect to read all about that fight on Facebook, Instagram, WhatsApp, Giphy, Oculus, and many other Facebook-owned platforms.

UPDATE: Dec. 9, 2020, 2:43 p.m. PST: Facebook released a lengthy blog post in response to the two lawsuits announced today. The statement, from Facebook's Newstead, attempts to confuse the issue of alleged anticompetitive practices with Facebook's long history of privacy and misinformation scandals.

Of course, we are aware of the atmosphere in which the FTC is bringing this case. Important questions are being asked about "big tech" and whether Facebook and its competitors are making the right decisions around things like elections, harmful content and privacy. We have taken many steps to address those issues, and we're far from done. We have called for new regulation to address some of them on an industry-wide basis. But none of these issues are antitrust concerns, and the FTC's case would do nothing to address them. Those hard challenges are best solved by updating the rules of the internet.