Why Maura Healey joined the lawsuit to break up Facebook
"I understand Facebook provides a service that a lot of people like. But how many other better and improved products are we never going to see as a result of what they did to try to kill competition?"
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Over the past four years, Massachusetts Attorney General Maura Healey hasn’t often found herself on the same side of a lawsuit as President Donald Trump. In fact, the Charlestown Democrat has now sued the Republican administration more than 100 times.
However, a new antitrust lawsuit this week against Facebook has brought Healey and the Trump administration — and 47 other state and territorial attorney generals — together.
“This is a company that just thinks it’s above the law,” Healey told Boston.com in an interview Thursday.
The lawsuit accuses Facebook of illegally maintaining a monopoly on the social media market through either acquiring up-and-coming platforms like Instagram and WhatsApp or engaging in anti-competitive practices against rivals it couldn’t buy.
Announced on Wednesday by the Federal Trade Commission following a years-long investigation, the lawsuit is asking a federal court to make Facebook spin off Instagram and WhatsApp back into separate companies and cease other alleged anti-competitive practices.
Healey, who is already in the midst of an investigation of Facebook’s use of user data, said Thursday that it’s “been very frustrating to see both the arrogance of Facebook and [its CEO] Mark Zuckerberg, and the unwillingness to own up to their problematic practices and fix them.” She argues the company’s actions suppressed the emergence of other, potentially better platforms in order to solidify its social media market share, which is estimated at over 60 percent.
“How many Facebooks are we never going to see?” Healey said. “I understand Facebook provides a service that a lot of people like. But how many other better and improved products are we never going to see as a result of what they did to try to kill competition?”
Facebook argues that they are innovating. In response to the lawsuit, the company said in a lengthy statement Wednesday that its purchases of Instagram in 2012 and WhatsApp in 2014 — both of which were approved by regulators at the time — “unquestionably” led to the improvement of both platforms because of Facebook’s ability to invest in them.
“The FTC and states stood by for years while Facebook invested billions of dollars and millions of hours to make Instagram and WhatsApp into the apps that users enjoy today,” wrote Jennifer Newstead, the vice president and general counsel for Facebook.
“We believed these companies would be a great benefit to our Facebook users and that we could help transform them into something even better,” Newstead said. “And we did. This lawsuit risks sowing doubt and uncertainty about the US government’s own merger review process and whether acquiring businesses can actually rely on the outcomes of the legal process.”
Healey, however, says Facebook’s actions and “huge monopolistic power” inoculates the giant from competition that could force it to change its more problematic features, from data privacy issues to an algorithm that promotes divisiveness.
Additionally, she argues that Facebook’s track record suggests that its actions were intended to neutralize its competitors, rather than improve them. According to the lawsuit, Facebook also engaged in a pattern of denying access to its application programming interface, or API, to third-party apps that offered similar functions (an API essentially allows two applications to send or share data with each other).
For example, the lawsuit includes emails showing that Facebook executives cut off API access for the video-sharing app Vine, which would have allowed users to find friends through Facebook, to limit its growth.
Vine, which was discontinued in 2016 amid video competition from Instagram, wasn’t the only example, as the Washington Post reported Wednesday. Other tech startups reportedly also fear Facebook’s tough tactics.
“They try to first go out and gobble up all the competition … and then when they couldn’t buy out a competitor or potential competitor or a new startup that might compete with them, they then just tried to bury them by essentially suffocating them and shutting off their access to the Facebook platform,” Healey said. “And as a result, there’s been harm.”
Still, experts say the lawsuit faces high hurdles to actually unwind Instagram and WhatsApp from Facebook, given how antitrust law in the United States focuses on the consumer rather than small businesses and startups — meaning the plaintiff must make the hypothetical case that social media users would be better off if Facebook hadn’t amassed so much power.
If successful, Healey said she doesn’t have a specific vision for how a smaller Facebook would look and operate, noting that, at the very least, the lawsuit asks the court to order Facebook to cease anti-competitive practices going forward.
“I think there are a lot of different possibilities there to explore,” Healey said. “That’s part of why it’s so important that we stop the bleeding now and get them to a place where they’re no longer acquiring company after company.”
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