Facebook Accused of Dominating Social Media, Networking Markets in Latest Antitrust Suit

On Tuesday, Facebook, Inc. was sued by a consumer who claimed that the social media giant violated federal and California antitrust laws by monopolizing the social network and social media markets. The class action complaint contends that Facebook both deceived its users about privacy protections afforded to them and used its market power to “acquire, copy or kill” competitors.

The filing recounts Facebook’s rise to dominance, allegedly not through fair competition and innovation, but instead through predatory conduct. The complaint first argues that Facebook duped consumers about the breadth of the data it collects from them and what it does with that valuable information, namely selling it. The complaint notes the enormous profits Facebook has reaped from advertisement sales, citing the $70.7 billion it earned in 2019.

The filing then delves into Facebook’s terms of services and argues that “…users give up personal information and agree to receive targeted advertisements on the Facebook platform in exchange for access to Facebook’s social media network and for a commitment from Facebook to protect user privacy.” The filing contends though users willingly accede their personal information and attention, Facebook did not hold up its end of the bargain. Instead, the filing asserts, Facebook hid its data collection and used practices to eliminate competition, though some of its duplicitous methods were unearthed in the 2018 Cambridge Analytica scandal.

The complaint next argues that Facebook has eradicated competition by forcing its rivals to sell at a bargain or face Facebook’s “destroy mode.” The plaintiff pointed to two of the defendant’s largest acquisitions, the mobile photo sharing app Instagram and the mobile messaging service WhatsApp, as examples. The filing explains that Facebook was prompted to buy them because, “[e]ach posed a unique and dire threat to Facebook’s monopoly, each had enormous and rapidly growing user networks, and each was well positioned to encroach on Facebook’s dominant market position.”

The consumer alleges that because of Facebook’s deception towards users and its underhanded acquisitions, the company successfully suppressed competition, leaving users without meaningful choice in the social network and media markets and causing users to receive less value for their data than they would have absent the anticompetitive conduct. The plaintiff asks for the certification of a nationwide class of persons and entities who have held Facebook accounts since 2007 and a parallel California class.

The filing requests that Facebook repay consumer losses and its unlawful gains. The plaintiff also seeks other equitable relief “to prevent Facebook from continuing to destroy competition and harm consumers.”

The plaintiff is represented by Andrus Anderson LLP and Reinhardt Wendorf & Blanchfield.