LANSING, Mich. — Wednesday Michigan Attorney General Dana Nessel joined a bipartisan coalition of 48 attorneys general in filing a lawsuit against Facebook Inc.
The lawsuit alleges the company illegally stifles competition to protect its monopoly power. The lawsuit continues, alleging that, over the last decade, the social networking giant illegally acquired threatening competitors and cut services to smaller competitors, depriving users of the benefits of competition, such as new innovations and more quality services, and reducing privacy protections along the way.
Facebook’s pervasive assault against antitrust law was ruthlessly conducted to boost its profits through increased advertising revenue.
“Facebook’s power as a monopoly has been solidified through its methodical erosion of any and all viable competition in this arena,” said Nessel. “My colleagues and I seek to protect consumers and their data by ending Facebook’s illegal, anticompetitive conduct and prevent this type of predatory behavior in the future.”
Since launching in February 2004, Facebook has operated as a personal social networking service that facilitates sharing content online without charging users a monetary fee. Instead, it provides these services in exchange for a user’s time, attention, and – most critically – personal data. Facebook then monetizes its business by selling the vast treasure trove of personal data collected from unwitting users to companies seeking to advertise to Facebook’s massive userbase with personalized messaging.
In order to maintain market dominance in social networking, Facebook uses a variety of methods to impede competing services. Chairman, Chief Executive Officer, and controlling shareholder Mark Zuckerberg has stated those methods are needed to “build a competitive moat” around the company and “neutralize a competitor.”
The two most used strategies have been acquiring smaller rivals and potential rivals before they could threaten Facebook’s dominance and to suffocate and squash third-party developers that Facebook invited to use its platform. That allows Facebook to maintain a monopoly over the social networking market and make billions from advertising revenue.
As one market participant said, if a mobile app infringed on Facebook’s turf and would not consider selling, Zuckerberg would go into “destroy mode,” resulting in the small businesses to experience the “wrath of Mark.”
The states not included in the group of 48 are Alabama, Georgia, South Carolina, and South Dakota.
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