A group of U.S. states led by New York is investigating Facebook for possible antitrust violations and plans to file a lawsuit against the social media giant next week, four sources familiar with the matter said on Wednesday.
The complaint would be the second major lawsuit filed against a Big Tech company this year. The Justice Department sued Alphabet Inc’s Google in October.
More than 40 states plan to sign on to the lawsuit, one source said, without naming them.
Facebook declined to comment.
A group of U.S. states led by New York is investigating Facebook for possible antitrust violations and plans to file a lawsuit against the social media giant next week, four sources familiar with the matter said on Wednesday
The Federal Trade Commission, whose commissioners met on Wednesday, could file a related complaint with an administrative law judge or in district court.
It is not known what the states plan to include in their complaint but it will likely accuse Facebook of creating an anti-competitive social media giant by buying up its competitors
One allegation often made against Facebook is that it has strategically sought to buy small potential rivals, often at a big premium.
These include Instagram in 2012 and WhatsApp in 2014.
The lawsuits will also likely allege that Facebook has left consumers with fewer social media choices after purchasing the other companies.
The sources say the investigations are now entering final stages and have looked at how Instagram and Whatsapp have changed since Facebook bought them in 2012 and 2014
In particular, investigators are looking at whether Facebook has left consumers with worse services and fewer privacy protections than if Whatsapp and Instagram had not been bought and remained independent.
State attorneys general launched the probe last year headed by New York Attorney General Letitia James.
Following news reports on the Facebook investigation James said in a statement: ‘We don’t comment on the details of an ongoing investigation, but as we have said before, we will continue to use every investigative tool at our disposal to determine whether Facebook’s actions stifled competition, reduced choices, or put user data at risk.’
The Federal Trade Commission, which is leading a separate probe into Facebook, recently spoke with state investigators about their case, sources said.
The commission approved Facebook’s purchases of both Instagram and Whatsapp.
In addition to New York, other lead states on the investigation include Colorado, Nebraska, Tennessee and Utah.
In particular, investigators are looking at whether Facebook has left consumers with worse services and fewer privacy protections than if Whatsapp and Instagram had not been bought and remained independent
The antitrust allegations against Facebook that will likely be included in the lawsuits are not new.
Lawmakers have repeatedly brought up the claims in recent congressional hearings and Facebook founder Mark Zuckerberg was questioned by lawmakers during a hearing back in July.
Facebook and Zuckerberg have repeatedly denied antitrust claims.
Last month, Senator Amy Klobuchar brought up Facebook and its ownership of the two other social media companies during a censorship hearing before the Senate Judiciary Committee involving Zuckerberg.
A protester outside of Mark Zuckerberg’s home urging Facebook to stop the spread of disinformation
Klobuchar brought up emails the Facebook founder sent prior to buying Instagram in 2014 in which he referred to the app as a competitor.
‘At the time, I don’t think we or anyone else viewed Instagram as a competitor — as a large, multi-purpose social platform,’ Zuckerberg said.
‘In fact, at the time, people at the time kind of mocked our acquisition because they thought that we dramatically spent more than we should have on something that was… primarily a photo and camera-sharing app.’
Zuckerberg has previously noted that the popularity of TikTok is proof there is a competition social media market.