Washington: The giant tech companies whose services are woven into the fabric of social life are now the targets of a widening assault by government competition enforcers. Regulators filed landmark antitrust lawsuits on Wednesday against Facebook, the second major government offensive this year against once seemingly untouchable tech behemoths.
The company’s conduct has crimped consumers’ choices and harmed their data privacy, the regulators charged.
Once lionized as innovators and job creators — and largely left alone by Washington for nearly two decades — Big Tech companies have seen their political fortunes plummet. Facebook, Google, Amazon and Apple have come under scrutiny from Congress, federal regulators, state attorneys general and European authorities. Their once-considerable political support in Congress has eroded.
Lawmakers of both major parties are championing stronger oversight of the industry, arguing that its massive market power is out of control, crushing smaller competitors and endangering consumer privacy.
There’s little likelihood the pressure will ease up. President-elect Joe Biden has said the breakup of Big Tech giants should be seriously considered.
Lawmakers and consumer advocates have accused Facebook of anticompetitive behaviour, most starkly in buying up aspiring smaller rivals like Instagram and WhatsApp and by copying features introduced by competitors. Critics say such tactics squash competition and could limit viable alternatives for consumers looking, for instance, for comparable services that do less tracking for targeted advertising. Businesses, including mom and pop shops, might have to pay more for ads if they have fewer choices to reach consumers online.
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The new lawsuits were announced by the FTC and New York Attorney General Letitia James, culminating separate investigations over the past year and a half.
The FTC said Facebook has engaged in a “systematic strategy” to eliminate its competition, including by purchasing smaller up-and-coming rivals like Instagram in 2012 and WhatsApp in 2014.
At a news conference, James said: “it’s critically important that we block this predatory acquisition of companies and that we restore confidence to the market.”
“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 James, a Democrat. “They reduced choices for consumers. They stifled innovation, and they degraded privacy protections for millions of Americans.”
Facebook called the government’s claims “revisionist history” that punishes successful businesses and noted that the FTC cleared the Instagram and WhatsApp acquisitions years ago. “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” Facebook general counsel Jennifer Newstead said in a statement.
Antitrust sceptics point to newer social media services such as TikTok and Snapchat as rivals that could “overtake” older platforms like Facebook.
Facebook is the world’s biggest social network with 2.7 billion users and a company with a market value of nearly $800 billion. CEO Mark Zuckerberg is the world’s fifth-richest individual and the most public face of Big Tech swagger.