The Federal Trade Commission is likely to sue Facebook for antitrust violations before the end of November, three people familiar with the probe said — the federal government’s first major swing at the social media giant amid a larger push to rein in Big Tech.
But the FTC is considering handling the case internally, a move that may make it easier to win, but that would take years and likely anger attorneys general from dozens of states who have been pushing for a swift, nationwide effort to force change at the company.
The suit, in the works for 16 months, is expected to allege that Facebook, the world’s biggest social network with 2.74 billion users, unfairly stifled competition as it snapped up smaller rivals and maintained a stranglehold on its users’ data. It could ultimately force Facebook to unwind its acquisitions of photo-sharing app Instagram and messaging platform WhatsApp.
FTC Chair Joe Simons favors keeping the suit in-house by bringing it before the agency’s administrative law judge, the people said, speaking anonymously because of the confidential nature of the probe.
Simons will need to persuade at least two of his fellow commissioners to agree to administrative litigation and if a President Joe Biden takes office, a new chair could reverse the plan. While both Republicans and Democrats have complained of tech companies’ power in recent years, progressives hope Biden will be tougher on the antitrust front than the Trump administration, particularly given calls from high-profile Democrats like Sen. Elizabeth Warren of Massachusetts to split up the giants of Silicon Valley.
Administrative cases are less public than federal court proceedings and the agency has never before brought a case of this magnitude internally.
An in-house suit would cut out states from joining the litigation. Dozens of states are also investigating Facebook and are on the verge of filing their own suit in federal court. They have been trying to persuade the FTC to join them in a combined effort that would give them all greater resources and clout in asking for big changes to Facebook’s business, such as court-ordered spinoffs of Instagram and WhatsApp.
New York Attorney General Tish James — whose office is heading the multistate probe — has circulated a proposed antitrust complaint and gave other states until last week to decide whether to sign on. As many as 30 states are expected to participate, one of the people said, and a complaint could be filed as soon as next week. News service The Capitol Forum first reported the potential timing of the state complaint.
Representatives for Facebook and the FTC declined to comment. A spokesperson for the New York attorney general didn’t respond to a request for comment.
The FTC often uses its in-house court for cases involving completed mergers or ones with complex or novel legal theories — both of which are present in the potential Facebook case.
But critics allege the agency’s in-house court allows it to act as “judge, jury and executioner” in its internal proceedings. The agency’s commissioners almost always side with the FTC’s staff over companies, and the process is also more lengthy, taking years to complete.
Even so, the FTC wins most of the time when companies appeal its decisions — cases that go to federal court. A 2016 study by Maureen Ohlhausen, then an FTC commissioner, found that appeals courts sided with the FTC in 61 percent of cases over the past 40 years.
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