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Facebook Likely to Face Antitrust Lawsuits

Last year, the Federal Trade Commission (FTC) and the House Judiciary Antitrust subcommittee began investigating possible antitrust violations by social media giant Facebook. Now, the company is likely to face at least one – if not two – lawsuits alleging antitrust violations.

In early December 2020, Reuters reported that several state Attorney General offices planned to join in on a lawsuit against Facebook, possibly during the second week of December. Anywhere from 20 to more than 40 states were considering being part of the case, which is being led by New York Attorney General Letitia James. Other states that have been part of the investigation include Colorado, the District of Columbia, Florida, Nebraska, Iowa, Ohio, Tennessee, and North Carolina. 

In addition, the FTC plans to file a claim against Facebook, as well. It is unclear whether the FTC will start with an in-house administrative case or a lawsuit in federal court, in which it might join with the states’ case. This case follows an FTC fine of $5 billion against Facebook last year for privacy violations, as well as a Department of Justice (DOJ) lawsuit against Google.

Claims Against Facebook

While details of the lawsuit are as of yet unknown, the claims are expected to center around Facebook’s acquisition strategy and motives. The House probe released documents from the investigation indicating that Facebook leaders were “threatened” by Instagram’s successful growth and competition. Further, Instagram founder thought that if they did not agree to sell the company to Facebook, CEO Mark Zuckerberg planned to “go into destroy mode.” Such pressure tactics to coerce a merger and acquisition and prevent competition in the social media market could constitute violations of antitrust laws. 

It is unknown what type of relief the states will seek in their antitrust lawsuits. They might possibly result in:

  • Fines and penalties
  • Commitment against future anticompetitive practices
  • The forced sale of certain parts of the company

We will be watching to see what the outcome of the Facebook cases will be.

Antitrust Investigations of Mergers and Acquisitions

Whenever two companies merge, or one company acquires another, there are always antitrust concerns. The FTC and DOJ look into the details of mergers to ensure they are not promoting anticompetition in the market. If investigators find that the merger and acquisition violates antitrust principles, they can impose restrictions or requirements on the companies or, possibly, disallow the entire transaction. 

It is important for any company – in any industry – considering a merger and acquisition to have the guidance and counsel of an experienced antitrust attorney. We can draft and review all contracts and terms of the deal to prevent issues with the government that might threaten the transaction and leave a lot of money on the table. 

Consult with an Antitrust Lawyer Handling Cases Nationwide

Companies of all sizes can face antitrust allegations, and you do not have to be a giant like Facebook to be under investigation. The Law Offices of George M. Sanders, P.C. advises companies regarding antitrust concerns. Contact us for more information today. 

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You need an experienced attorney at the Law Offices of George M. Sanders, P.C., who specializes in physician health care antitrust law.

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