Facebook Chairman and CEO Mark Zuckerberg testified at the House Financial Services Committee hearing in Washington on October 23, 2019.
Erin Scott | Reuters
The state’s attorney general is preparing to file an antitrust case against Facebook next week, sources familiar with the matter told CNBC’s Yalan Mui. At least 20 to 30 states will join it, sources said.
As soon as the news came, multiple outlets reported that the Federal Trade Commission was likely to file its own antitrust case against the social media giant. It is still unclear whether the FTC may choose to bring the case – either in federal court or before its administrative law judge. If he chooses to bring the case to the House, he will not be able to link his lawsuit with the states. Reuters had earlier reported that the states were planning an antitrust case against Facebook.
Both the FTC and the state AG, led by New York’s Letitia James, have been investigating Facebook since last year.
Although the full scope of their investigation remains private, the acquisition of the former Instagram and WhatsApp tsp by Facebook is considered a source for additional scrutiny by enforcement advocates.
Documents released this summer by the House Judiciary Subcommittee on distrust from its own probe into Facebook show the company’s inner thinking surrounding its acquisition strategy. Internal messages show that before the acquisition, Facebook was threatened by the growth of Instagram, and Instagram co-founder fears that Facebook CEO Mark Zuckerberg will “go into distam mode” if he refuses to sell.
Facebook will become the second largest tech company to meet the challenge of mistrust of government officials in the past year. Google is facing lawsuits from the Department of Justice and several states are also continuing to investigate the company.
The outcome of a no-confidence lawsuit against both companies could vary widely. If they fail to overcome legal challenges, they may be forced to spin parts of their businesses or commit to changing certain methods.
James’s office fees, FTC and Facebook all declined to comment.
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