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AGs' Lawsuit Accuses Facebook Of Gobbling Up Competitive Threats

NOEL KING, HOST:

Facebook crushes the competition. That's one of those cliches we use to talk about big, successful companies. But is Facebook crushing the competition legally or illegally? That's something the courts will decide. The Federal Trade Commission and attorneys general from across the country are suing Facebook. They say the company eliminated competition by either buying other companies or making it impossible for them to succeed. Connecticut Attorney General William Tong is one of the 48 AGs involved in the suit. Thank you, sir, for being here.

WILLIAM TONG: Good morning, Noel.

KING: Facebook has been a dominant company for years now. Why are you filing this lawsuit right now?

TONG: You know, Facebook has expansive monopoly power. And what it's done with that power and its market dominance is it's engaged in a program of what we call buy and bury, where they either buy up their competitors or, if they don't play ball and sell, they crush their competitors. And what they've done is they've crushed any threat to their business and their market domination. They've eliminated choice for consumers. And they've beat third-party app developers and software developers into submission.

KING: And your argument is that's illegal. That's not just being a smart, competitive business.

TONG: No, it's not just being smart. When you're a business like Facebook and you, essentially, dominate an entire field that means so much to people today, particularly in a global pandemic and a public health emergency, when we rely so much on technology to stay in touch with our friends, our family, to do business, to sell products, to advertise - social media has become central, really, in our lives. And when you're the dominant market player, you have an obligation not to abuse that power. And what Facebook has done, it's - it has abused its market power to keep competitors out of the marketplace and to leverage that market power to prejudice anybody who doesn't play by Facebook's rules.

KING: OK. But how have users been hurt by what you're alleging Facebook has done? The ordinary people of Connecticut, how are they getting hurt here?

TONG: So they really don't have any choice. They - because Facebook not only is the dominant player in its own right through Facebook, but because they've bought Instagram, which targets a younger generation including my kids, and WhatsApp, which is a widely, globally used social messaging, direct, peer-to-peer messaging app - because they've done that, you really have very limited options. And so you don't have a choice on where you go to for social media, No. 1, or to buy products, for example - on Facebook marketplace. And if you're a small business in Connecticut or even a bigger business and you want to advertise or sell products, you really have to use Facebook or one of its companion products. So you don't have any choice in the matter. And because of that...

KING: Let me jump on you there. Facebook argues that there is competition. And I will tell you, the young people in my life - the teens, the tweens - they don't care about Facebook at all. They're all on TikTok. Is it possible that in five, 10 years, Facebook will be kind of irrelevant or at least not the behemoth it is now, and that this is just sort of panicking over something that - companies become dominant for a few years, and then they tend to fade?

TONG: No. Our view is unless we do something that won't be the case because Facebook has, frankly, so much money and so much market power. And that's why they're buy or bury strategy is so successful, because they can go and pay outsized prices for Instagram and WhatsApp and, essentially, stifle competition that way. So no, we think that unless the court takes action and unless the 48 states plus the FTC are successful, Facebook will continue to dominate this space.

KING: Facebook's general counsel makes an interesting argument, noting that Facebook bought Instagram in 2012 and bought WhatsApp a few years later. And federal regulators said that was fine. And now, basically, they're going back on what they said. What do you think about that argument?

TONG: Well, we certainly weren't part of that determination. And we look forward, over the next few years, to more robust antitrust enforcement and enforcement of our nation's and our states' antitrust laws. And the states, the 48 of us, have done our own investigation and now, in concert with the Federal Trade Commission, have determined that Facebook is acting illegally.

KING: OK. Connecticut Attorney General William Tong. Thanks so much for your time today. We appreciate it.

TONG: Thank you, Noel. Transcript provided by NPR, Copyright NPR.


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