Facebook could face an antitrust lawsuit from at least 20 states as soon as next week

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Facebook Chairman and CEO Mark Zuckerberg testifies at a House Financial Services Committee hearing in Washington, October 23, 2019.
Erin Scott | Reuters

State attorneys general are preparing to file an antitrust lawsuit against Facebook as soon as next week, sources familiar with the matter told CNBC’s Ylan Mui. At least 20 to 30 states could join in, the sources said.

The news comes as multiple outlets have reported the Federal Trade Commission is likely to file its own antitrust lawsuit against the social media giant. It’s still unclear where the FTC may choose to bring a case — either in federal court or before its administrative law judge. If it chooses to bring the case in-house, it cannot combine its lawsuit with the states. Reuters previously reported the states were planning an antitrust case against Facebook.

Both the FTC and the state AGs, led by New York’s Letitia James, have been investigating Facebook since last year.

Though the full scope of their investigations remain private, Facebook’s past acquisitions of Instagram and WhatsApp have long been considered a source for additional scrutiny by enforcement advocates.

Documents released this summer by the House Judiciary subcommittee on antitrust from its own probe into Facebook demonstrated internal thinking at the company around its acquisition strategy. The internal messages showed Facebook appeared threatened by Instagram’s growth just before the acquisition and that Instagram’s co-founder feared Facebook CEO Mark Zuckerberg would “go into destroy mode” if he refused to sell.

A lawsuit would make Facebook the second major tech company to face an antitrust challenge from government officials in the past year. Google is facing a lawsuit from the Department of Justice and several states are continuing to investigate the company as well.

The outcome of antitrust lawsuits against either company could vary widely. If they fail to win legal challenges, they could be forced to spin off parts of their businesses or commit to changing certain practices.

James’ office, the FTC and Facebook all declined to comment.

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