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Feds Want to Break Up Facebook, and 48 Attorneys General Pile on in Giant Antitrust Actions

The Federal Trade Commission (FTC) has filed a lawsuit seeking to break up Facebook, which simultaneously faces antitrust allegations leveled by 48 state attorneys general on Wednesday.

Led by New York Attorney General Letitia James (D), the latter lawsuit has a magisterial scope of anticompetitive conduct dating back to Facebook’s acquisition of Instagram in 2012.

“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,” James said 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 lawsuit also has been a long time in the making.

Asked by a reporter about possible settlement negotiations with Facebook’s CEO Mark Zuckerberg, James demurred: “I’m not going to negotiate in the public and again, will not divulge the conversations that we’ve had with Facebook.”

Cataloguing Facebook’s acquisition of WhatsApp and Instagram—and alleged “buy or bury” modus operandi with the competition—the AGs want a court order blocking the social media giant from any other buyouts worth more than $10 million.

“We will not allow any company to think that they are too big to fail,” James added later.

The FTC goes to even greater lengths in seeking divestiture of assets.

“Personal social networking is central to the lives of millions of Americans,” Ian Conner, director of the FTC’s Bureau of Competition, said in a statement. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

The FTC complaint wants a judge to order “divestiture of assets, divestiture or reconstruction of businesses (including, but not limited to, Instagram and/or WhatsApp), and such other relief sufficient to restore the competition that would exist absent the conduct alleged in the complaint.”

Spanning 76 pages, the AGs’ complaint depicts the purchase of Instagram as one of #TotalDomination and described a climate of fear of those targeted by the “wrath of Mark.”

“Facebook has coupled its acquisition strategy with exclusionary tactics that snuffed out competitive threats and sent the message to technology firms that, in the words of one participant,if you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode’ subjecting your business to the ‘wrath of Mark,'” the complaint states. “As a result, Facebook has chilled innovation, deterred investment, and forestalled competition in the markets in which it operates, and it continues to do so.”

(Photo by Johannes Simon/Getty Images)

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Law&Crime's senior investigative reporter and editor Adam Klasfeld has spent more than a decade on the legal beat. Previously a reporter for Courthouse News, he has appeared as a guest on MSNBC, BBC, NPR, PBS, Sky News, and other networks.