apps blur button close up

New Jersey Joins Legal Challenge of Facebook’s Monopoly

New Jersey Attorney General Gurbir S. Grewal joined 47 other Attorneys General across the U.S. in filing a suit against Facebook Inc., alleging the Silicon Valley stalwart violated federal antitrust laws.

The suit alleges the company monopolized the market for personal social networking services, as well as engaging in illegal mergers and other anti-competitive tactics to maintain its status and power.

Grewal argued big tech companies that engaged in these practices would not be tolerated. “That is precisely what we are doing with today’s lawsuit against Facebook: we are showing that no company is too big or too powerful to avoid scrutiny,” he said.

Increasing Advertisements and Personal Data Collection

The suit claims the company significantly increased the “ad load” on social media pages, and pointed to the acquisition of Instagram as example. The platform saw a 50% increase in ads following the acquisition.

While these ads prevented users from seeing more of the “family and friends content” that they signed up for, the Big Tech goliath extracted more personal information from their users.

Because Facebook does not allow for a full and independent verification of its advertising performance metrics, the suit alleged the reliability of its  “quality adjusted” prices charged to businesses looking to advertie on the platform could not be determined.

FTC Joins in the Lawsuit

While the 48 Attorneys General sued the company, they were not alone in their legal pursuit: the Fedeteral Trade Commission (FTC) joined the suit, arguing it was able to maintain its personal social networking monopoly through years of anticompetitive conduct.

The agency pointed to its systematic acquisition strategy as proof of its anticompetitve behavior, citing the 2012 acquisition of Instagram and the 2014 acquisition of WhatsApp.

“Personal social networking is central to the lives of millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition. “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.”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.