Over 40 US states led by the state of New York are probing Facebook Inc. (NASDAQ:FB) for potential antitrust violations with plans to file a suit against the company as early as next week. The lawsuit is a second major suit filed against a tech giant following the Justice department’s lawsuit against Alphabet Inc.’s (NASDAQ:GOOGL) Google in October.
More than 40 states join a lawsuit against Facebook
According to sources familiar with the matter, around 40 states are planning to sign the lawsuit. The social media giant has not issued a comment on the potential lawsuit. The Federal Trade Commissioners met on Wednesday and recommended filing a lawsuit against the company in a federal court. According to a source that sought anonymity, this will allow more than 40 states to join the suit.
However, it is unclear what the states will include in their complaints. Still, one of the sought allegations is that the media giant has been stifling competition strategically by acquiring potential rivals. The states and the FTC are yet to finalize the complaint against Facebook and could consider filing alone in a district court with the states filing separately. Alternatively, they could file a joint lawsuit at the district court.
Facebook under probe for stifling competition
Following news of the probe, Letitia James, Ney York’s Attorney General, stated that they could not comment in details of an ongoing probe. However, James reiterated that they are using all investigative actions to ascertain how the social media giant stifles competition, puts personal user data at risk, and reduced choices.
Facebook is under probe for violation of antitrust laws following its $1 billion acquisition of photo-sharing app Instagram in 2012. The FTC accuses it of weakening privacy protections for WhatsApp’s encrypted messaging app following its $22 billion acquisition in 2014. Another charge that Facebook could face is squashing rivals by declining to share user data. In the past, privacy activists and antitrust experts have been critical of the FTC for its role in the approval of WhatsApp and Instagram’s purchase.