On December 9, the Federal Trade Commission and 48 state attorneys general, led by New York Attorney General Letitia James, filed separate antitrust complaints in the federal district court for the District of Columbia. The complaints allege violations of Section 2 of the Sherman Act, 15 U.S.C. § 2, and Section 7 of the Clayton Act, 15 U.S.C. § 18. The FTC and State AGs request extraordinary equitable relief “sufficient to restore the competition that would exist absent the conduct alleged,” specifically the divestiture of Instagram and WhatsApp.
Of course, the FTC cleared Facebook’s acquisitions of Instagram and WhatApp when they were subjected to antitrust review at the time of the transactions in 2012 and 2014, respectively. This is not surprising. As I wrote in October, “[b]oth Democratic and Republican administrations were blinded into regulatory inaction by the myth of entrepreneurship nurtured by the industry’s extensive lobbying and campaign contributions.” Fault for Facebook’s allegedly dominant position in the defined market should be laid squarely at the doorstep of regulators asleep at the wheel.
However, the State AG complaint offers an intriguing allegation: that by eliminating competition in the alleged market for “personal social networking” (mostly through the acquisition of its potential rivals), Facebook used its resulting monopoly power to degrade user privacy. By attempting to thread the needle between privacy concerns and antitrust enforcement, the State AGs begin to scratch the surface of how unregulated business conduct can harm the common good and offers a glimpse beyond the free market worship embedded from the very beginning of antitrust laws.
Unfortunately, the State AGs’ harm to privacy allegations are sparse in the complaint and are entirely subsumed by the same overtures to “consumer choice” and “product mix” typical of contemporary antitrust litigation, the natural conclusion of liberalism’s unraveling of the regulation of business conduct from legitimate moral authority. If only there were an infinite number of plucky start-ups like Instagram, our concerns about the overreach of Big Tech and their founding plutocrats would disappear! Once more, preserving competitive conditions in the market for “personal social networking” (leaving ample room for the next Zuckerberg) falls short of reforming Big Tech in a way that promotes the true common good.
Maria Messina