In a filing in U.S. District Court in Washington, D.C., the social media giant called the suit baseless.
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The FTC “utterly ignores the reality of the dynamic, intensely competitive high-tech industry in which Facebook operates,” it said. The states’ case “does not and cannot assert that their citizens paid higher prices, that output was reduced, or that any objective measure of quality declined as a result of Facebook’s challenged actions.”
The suit accuses Facebook of seeking to preserve its dominance by squeezing out and buying up smaller rivals – like Instagram and WhatsApp. The FTC had approved both of those deals but argues that time and evidence shows they were pursued with an eye to preserving monopoly status.
“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,” said Leticia James, the Attorney General of New York, when the suits were filed Dec. 9. “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,” she said then.
Antirust has historically focused on price to consumers – if they’re paying more because a company is too big. But Facebook’s service is free to users. A more recent reading of antitrust looks at other harms that happen when there is no real competition so no viable options — to, in this case – using Facebook. Erosion of consumer privacy protections is one of the biggest alleged harms.
The FTC and states will respond to the motion next month.
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