In a coordinated attack following over a year of investigation, federal regulators and a coalition of nearly all state attorneys general filed a pair of lawsuits against Facebook on Wednesday, arguing that the social media giant has become an illegal monopoly and should not only be broken up but also face limits on future mergers so it can't engage in any more alleged anti-competitive behavior.

"For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users," said New York Attorney General Letitia James in a statement. James is leading the state lawsuit (pdf), which is backed by the AGs of 45 other states—all but Alabama, Georgia, South Carolina, and South Dakota—as well as the District of Columbia and Guam.

"We are taking action to stand up for the millions of consumers and many small businesses that have been harmed by Facebook's illegal behavior," she said. "Instead of competing on the merits, Facebook used its power to suppress competition so it could take advantage of users and make billions by converting personal data into a cash cow."

Noting that "almost every state in this nation has joined this bipartisan lawsuit because Facebook's efforts to dominate the market were as illegal as they were harmful," James added that the suit "should send a clear message to Facebook and every other company that any efforts to stifle competition, reduce innovation, or cut privacy protections will be met with the full force of our offices."

Filed in U.S. District Court for D.C., the state complaint explains that "users do not pay a cash price to use Facebook," a social media platform launched in 2004 by chairman, CEO, and controlling shareholder Mark Zuckerberg. "Instead, users exchange their time, attention, and personal data for access to Facebook's services."

As the complaint details:

Facebook makes its money by selling ads. Facebook sells advertising to firms that attach immense value to the user engagement and highly targeted advertising that Facebook can uniquely deliver due to its massive network of users and the vast trove of data it has collected on users, their friends, and their interests. The more data Facebook accumulates by surveilling the activities of its users and the more time the company convinces users to spend engaging on Facebook services, the more money the company makes through its advertising business.

The state AGs charge that "Facebook has had monopoly power in the personal social networking market in the United States" for almost a decade, and the company "illegally maintains that monopoly power by deploying a buy-or-bury strategy that thwarts competition and harms both users and advertisers."

Both the state case and the new lawsuit (pdf) filed Wednesday by the Federal Trade Commission (FTC) in the same court draw attention to Facebook's acquisitions of the photo-sharing platform Instagram in April 2012 for $1 billion and the messaging service WhatsApp in February 2014 for nearly $19 billion.

"Today's enforcement action aims to restore competition to this important industry and provide a foundation for future competitors to grow and innovate without the threat of being crushed by Facebook," FTC Bureau of Competition Director Ian Conner said in a statement. "The commission's requested relief includes unwinding Facebook's prior acquisitions of Instagram and WhatsApp, and barring Facebook from engaging in additional anti-competitive practices that have helped it dominate the personal social networking market."

After acknowledging the cooperation with the states, Conner added that "the American public deserves a competitive and vibrant personal social networking market, and we are taking this action to restore the competitive vigor necessary to foster innovation and consumer choice."

As the Washington Post reported Wednesday:

Republished from Common Dreams (Jessica Corbett, staff writer) under a Creative Commons Attribution-Share Alike 3.0 License.