The Antitrust Lawsuits Against Facebook: What You Need to Know

Published On: December 10th, 2020Categories: UncategorizedBy

 

On December 9th, news broke that the Federal Trade Commission and 48 state attorneys general filed two separate antitrust lawsuits against the social media giant, Facebook. These parties claim that the social network has hurt competition in the digital space by purchasing companies like Instagram and WhatsApp.

The first lawsuit was filed by the states, focusing on Facebook’s $1 billion purchase of Instagram in 2011. New York Attorney General, Letitia James, stated:

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition. Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance.”

Additionally, the state suit seeks a court order requiring Facebook to notify state officials of any future acquisitions valued at $10 million or more. They also feel that the company should be fully broken up if necessary.

The lawsuit filed by the FTC was filed on the same grounds but goes a bit deeper than the state case, calling on the court to force Facebook to sell off their prized assets – Instagram and WhatsApp. Director of the FTC’s Bureau of Competition gave the following statement:

“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

Since its launch in 2004, these lawsuits are the biggest legal and political threats Facebook has ever faced. This high-profile battle between United States regulators and the social media giant could take years to conclude.

In response to the lawsuits, Facebook posted a lengthy response on their site, stating that the FTC lawsuit is based on ‘revisionist history.’ The social network also highlighted  Apple, Google, Twitter, Snap, Amazon, TikTok, and Microsoft as its key competitors.

From our POV here at BBstone, this situation is not at all surprising or unexpected, nor do we feel that it’s a cause for alarm for advertisers. Below is our take on this developing story…

What these lawsuits could mean for brands on social media

At a high level – this situation will not have any notable effects on businesses using social media to promote their products and services.

As mentioned earlier, these lawsuits could take years to conclude. Therefore, organic and paid content is not likely to be affected in 2021 and into 2022. We encourage you to continue to focus on your social media strategies for the new year as planned!

We see this scenario as an opportunity for growth, as it would create new opportunities for businesses to connect with their current and potential customers. Competition is healthy for the digital space, and the outcome of these lawsuits is sure to create even more dynamic ad and community engagement offerings for brands to leverage.

In terms of Facebook itself, our founder, Sonja Bellem, shared her take on the lawsuits, stating:

“Facebook always lands on their feet. They’re very dynamic, very creative, and they’re going to morph in ways that will maybe make things better and more advantageous for advertisers on this network. I wouldn’t be surprised if they’ve got something up their sleeve – that they saw this coming and that they have other solutions planned for us…” 

For Sonja’s full statement, check out our Instagram post.

This story is developing, and we will be here to keep our clients and readers in the loop with the latest developments as they unfold.

Looking for expert advice on the future of advertising? Call, DM, or email us at sbellem@bbrookstone.com to get started. We would love to help you develop your social media strategy for 2021 and beyond!

 

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