Facebook Officials Dispute Multistate Antitrust Lawsuit

A lawsuit, filed by 48 attorneys general, claims that the company has a monopoly over social networking in the U.S., noting that more than half the country’s population over the age of 13 uses a Facebook service every day.

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(TNS) — As Ohio and other states are accusing Facebook of antitrust violations, representatives of the social media giant say their company faces plenty of competition and that it should be up to state lawmakers to regulate it on issues such as privacy.

Members of Facebook’s policy and legal team laid out their arguments against the lawsuit during a meeting this week with the editorial board of cleveland.com/The Plain Dealer. (Cleveland.com has business relationships with Facebook in a variety of ways that affect this news organization’s revenue.) 
 
The lawsuit, filed by 48 attorneys general, claims that Facebook has a monopoly over social networking in the United States, noting that more than half the country’s population over the age of 13 uses a Facebook service every day.
 
Facebook uses a “buy-or-bury strategy” to maintain that monopoly, the lawsuit claims, by either purchasing potential rivals or using its clout to thwart them. Facebook’s market dominance, the suit continues, gives the company “wide latitude” to set its own rules for how it collects, uses, and protects users’ private information, and to profit from that information even when it’s not in users’ best interests. Eliminating rivals also harms advertisers in a number of ways, the lawsuit claims.
 
The lawsuit asks the U.S. District Court for the District of Columbia to rule that Facebook’s acquisition of Instagram and WhatsApp (popular photo-sharing and chat applications, respectively) to be in violation of antitrust law — a move that could result in Facebook having to sell those companies.
 
The suit also asks, among other things, that states involved in the action be given advance notice before Facebook acquires any other company for $10 million or more. Kate Patchen, associate general counsel for Facebook’s litigation team, said that various aspects of Facebook each have a number of competitors, and that Facebook has numerous rivals for people’s time and attention.
 
“There are a number of other ways that you can communicate with friends and family, and there are a number of other ways that you could spend your time,” Patchen said. Patchen also said it’s the “wrong time” for states to challenge Facebook’s purchase of WhatsApp and Instagram, considering those deals took place years ago and Facebook has invested “a tremendous amount of money” in those products.
 
Facebook officials and lawyers also made other legal arguments against the states’ lawsuit, including that the federal government – not states – should be the one enforcing federal antitrust law. They also argue that the states must show that the states themselves – not just their residents — have been injured by Facebook, and that the lawsuit doesn’t prove that. “Not only do we believe there’s a lack of consumer harm, but the competition that Facebook faces across all of our products actually benefits consumers,” said Christen DuBois, another member of Facebook’s litigation team.
 
In recent years, Facebook has faced a variety of criticism, from concerns over privacy to its role in spreading misinformation.
 
Will Castleberry, Facebook’s vice president of state policy and community engagement, said those issues should be resolved by state and federal lawmakers and regulators, not through an antitrust lawsuit. “Instead of addressing those (frustrations) in the channels they should, they’re addressing them through an antitrust lawsuit, which isn’t the right channel – and, candidly, won’t create the solutions that they’re looking for,” he said. Castleberry added that there’s “absolutely a need” for government to regulate Facebook regarding a number of issues, from privacy controls to “revenge porn.”
 
Ohio Attorney General Dave Yost, when asked in an interview if the problems laid out in the lawsuit should be left to the legislature to resolve, replied: “Well of course the legislature did act — it’s called the Sherman Antitrust Act of 1890. So, maybe (it’s) 130 years late, but I think they could probably Google it.” Yost, a Columbus Republican, said the lawsuit’s main issue is Facebook’s “predatory” acquisition of up-and-coming competitors. Yost said Congress “maybe ought to revisit” Section 230 of the 1996 Communications Decency Act, which offers protections for Facebook and other platforms from lawsuits over illegal material or copyright violations posted by users.
 
“There are things that maybe ought to be directed toward Congress rather than the courts, but that doesn’t mean that we don’t have a righteous complaint before the court,” Yost said. “I believe we do.”
 
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