Facebook antitrust lawsuit: What to know

On Behalf of | Mar 8, 2021 | business litigation

Business owners often strive for success and to be the best in their industry. This is an understandable goal, but all business owners must ensure they adhere to the state and federal regulations on competition while they navigate the business world to meet that goal.

No matter the size or kind of business, it is critical to avoid any action that could be construed as violating antitrust laws. This is critical to avoid serious long-term legal issues or penalties, as shown by the recent landmark case against Facebook.

First: What is the purpose of antitrust laws?

The federal government enforces antitrust laws to ensure fair competition across all industries in the business world. These laws prevent companies from:

  • Fixing prices of their products or services
  • Arranging bids for contracts or other business deals
  • Engaging in exclusionary or unfair tactics that force competitors’ hands

Any dealings with other businesses in one’s industry must comply with these laws to ensure a fair market and avoid serious legal penalties that could damage their business’s reputation and their business itself.

Government files antitrust lawsuit against Facebook

There is a long history of companies facing antitrust lawsuits in the United States. While they are not as common as many other legal issues businesses could face, antitrust actions can have much larger consequences.

In December of 2020, the U.S. government made waves in the business world when it filed an antitrust lawsuit against the social media giant Facebook. The federal lawsuit, in addition to a lawsuit involving 46 states, claims that Facebook is stifling competition in the tech and social media world, using tactics to specifically damage competitors.

This is an effect of the larger inquiry into the world of tech business as a whole, as the government investigates how companies like Amazon, Apple, Google and now Facebook impact the market in this industry.

Why should business owners take note?

The effects of this case could be monumental on the tech world – and the business world as a whole. It could:

  • For Facebook namely, result in an order to break up the company
  • Impact the limits of tech start-ups, according to CNN
  • Set a precedent for antitrust issues for tech companies, which in this developing industry is an often-complex matter
  • Lead to additional regulations for consumer privacy, on top of those outlined by the new California Privacy Rights Act (CPRA)

Even business owners who do not operate in the tech sector should ensure they are aware of the risks such a lawsuit – and the particular outcome of this action – could pose to the future of the business world.

Business owners must carefully review the details of this case, as well as their practices and dealings with other entities to ensure they are in compliance with all aspects of these laws.