Facebook probe in final stages as FTC, U.S. states prepare lawsuits



© Reuters. FILE PHOTO: A 3D-printed Facebook logo is seen placed on a keyboard in this illustration

By Diane Bartz and Paresh Dave

WASHINGTON (Reuters) – The Federal Trade Commission and a bipartisan group of dozens of state attorneys general are in the final stages of filing one or more major antitrust complaints against Facebook Inc (O:) in early December, according to four sources familiar with the situation.

FTC staff undertaking a probe of the company has recommended to commissioners that they sue the social media company in federal court, which would allow the group of states, led by New York, to join the lawsuit, according to one source.

As many as 41 states may sign on to the lawsuit, three sources said. The filing of the lawsuit or lawsuits could slip into next year, the sources said.

Following news reports on the Facebook investigation, New York Attorney General Letitia 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 FTC and states have yet to finalize how they might file any lawsuits. The FTC may file alone to a district court while the states file their complaint separately; the FTC can file to an administrative law judge and states can file in district court, or they can join forces and sue together in district court, two sources said.

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The FTC declined comment while Facebook could not immediately be reached for comment.

In addition to New York, other lead states on the investigation include Colorado, Nebraska, Tennessee and Utah, one of the sources said.

The legal action is expected to focus on Facebook’s alleged violations of antitrust law to build and protect its gigantic market share in social media.

The FTC has been criticized for its approvals of Facebook’s purchase of Instagram, which it bought in 2012, and WhatsApp, acquired in 2014.

A comprehensive report by the House of Representatives Judiciary Committee of the four Big Tech companies found that Facebook used its access to superior market data to identify coming competitive threats so those companies could be copied, purchased or choked off by restricting access to Facebook data.

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