By
Bhushan Akolkar
April 25th, 2024
Facebook has been alleged to withhold critical data from its competitors thus crushing them.
Social media giant Facebook Inc (NASDAQ: FB) faces a possible antitrust lawsuit from over 40 US states led by New York City. According to news outlet Reuters, the lawsuit is likely to be focused on the recent acquisitions made by Facebook including Whatsapp and Instagram.
In response to this, New York Attorney General, Letitia James, said they “don’t comment on the details of an ongoing investigation, but as we have said before, we will continue to use every investigative tool at our disposal to determine whether Facebook’s actions stifled competition, reduced choices, or put user data at risk.”
Earlier this week, Forbes reported that Facebook and Google LLC (NASDAQ: GOOG) (NASDAQ: GOOGL) face lawsuit cases filed by the federal and state governments. However, the outcome of the cases will largely be affected by the new appointees at the department of antitrust and also the Attorney General made by the incoming president Joe Biden. As a result, making the case more difficult if the respective departments will not agree on set issues.
“These are hard cases – every one of them. They are not open and shut. They are going to run a lot like the Microsoft case did 20 years ago. In that case, the government won certain issues and lost some others. That could certainly happen here.” said Herbert Hovenkamp, an antitrust expert.
Facebook Lawsuit Cases
Facebook has been alleged to withhold critical data from its competitors thus crushing them. In addition, the states are likely to argue that the company has made acquisitions that have undermined the overall fairness in healthy competition.
However, Facebook CEO Mark Zuckerberg has in the past stated that the company has its subsidiaries independent and thus free from the parent company’s interference. In addition, Zuckerberg at congressional testimonies has argued that the company has other major big tech competitors in the market.
Notably, as the cases keep on emerging from different jurisdictions, Facebook shares remain on the receiving end and likely to shrink in the coming quarters. According to the metrics provided by MarketWatch, Facebook shares are up approximately 40.08% year to date. However, they have dropped 1.24%, and 2.43% in the past three months and one month respectively. Mostly affected by the recent United States presidential election that has a past known history with Facebook shares.
The company has a market valuation of approximately $816.18 billion with 2.4 billion outstanding shares.
With its advertisement sector, a major source of revenue, significantly impacted by the ongoing coronavirus pandemic, Facebook shares remain at higher risks of shrinking in the coming quarters.