Day: December 9, 2020

AG Grewal Announces Federal Antitrust Lawsuit Against Facebook Alleging that Company Exerted Monopoly Power and Engaged In Anti-Competitive Conduct

December 9, 2020

TRENTON, NJ (MERCER)–New Jersey Attorney General Gurbir S. Grewal today joined with 47 other Attorneys General in suing Facebook, Inc. for allegedly violating federal antitrust laws by monopolizing the market for personal social networking services, and by using illegal mergers and other anti-competitive tactics to maintain its monopoly power.

Filed in federal court, the multi-state complaint alleges that Facebook has aggressively maintained “monopoly power” in the market for personal social networking services for a decade. According to today’s filing, the popular web platform has undermined competition and dominated the market “by deploying a buy or bury strategy” to eliminate competition from emerging rivals, which in turn has harmed Facebook’s consumers, advertisers, competitors and the economies of the states.

The complaint alleges that Facebook’s illegal conduct resulted in heftier profits for the company and a diminished experiences – including fewer privacy options – for users of Facebook’s core platform, as well as for users of the once-rival platforms that Facebook acquired, like Instagram and WhatsApp.

“Social networking companies like Facebook exert incredible influence and power over how we experience the world today,” said Attorney General Grewal. “Meanwhile, they monetize our data and sell targeted ads based on our personal information and usage patterns. But big tech companies that acquire and exert their power and influence over our behavior through unlawful means and in illegal ways must be held to account. And that is precisely what we are doing with today’s lawsuit against Facebook: we are showing that no company is too big or too powerful to avoid scrutiny.”

Among other things, the states’ allege that Facebook profited by significantly increasing the “ad load” on its social media pages (including on Instagram, which saw a 50 percent ad load increase in 2018 following its acquisition by Facebook).

In addition to Facebook users seeing more ads and less of the “family and friends content” they sign on to enjoy, the complaint alleges users have suffered both as Facebook has increased the amount of personal information it extracts from them and because it has failed to remove fake accounts, hate speech, misinformation, and other content that harms their experience and public welfare more generally.

The states further asserts that businesses advertising with Facebook are often charged “quality adjusted” prices to promote their products or services, but cannot gain a reliable sense of how the ads are performing because Facebook does not permit full, independent verification of its advertising performance metrics. 

One count of today’s three-count lawsuit alleges that Facebook violated the Sherman Act by unlawfully maintaining a monopoly in the market for personal social networking services. Two other counts allege that the company enhanced its monopoly power and violated the Clayton Act through its unlawful acquisitions of once-rival social media platforms Instagram and What’sApp.

Through these unlawful acquisitions, the complaint alleges, Facebook has stifled the type of competition that would otherwise lead to enhanced user experiences, including greater variety and quality of user options, as well as more features and a broader array of privacy protection options.

The complaint seeks a variety of relief, including asking the court to find the Instagram and WhatsApp acquisitions illegal enjoining Facebook from making certain future acquisitions without advance notification to the participating states.

Deputy Attorney General Robert N. Holup of the Consumer Fraud Prosecution Section in the Division of Law’s Affirmative Civil Enforcement Practice Group is handling the Facebook matter on behalf of the State.


House Passes 2021 Defense Bill

Smith: Defense bill helps service members, NJ military missions, $37M for JB-MDL

December 9, 2020

Joint Base, MDL –The House passed and Congressman Chris Smith (NJ-04) voted for the 2021 National Defense Authorization Act (NDAA) today, new legislation that will protect the airlift and air refueling missions at America’s only tri-service installation, Joint Base McGuire-Dix-Lakehurst (JB-MDL), and brings $37 million in construction jobs that will support construction work for the local economy.

    “The bill requires the Secretary of the Air Force to maintain a minimum of 50 KC–10 Extender tankers—many of which are based at JB-MDL here in New Jersey—through fiscal year 2021, 38 Extenders through FY2022 and 26 through 2023,” Smith said. “This timetable should allow the critical air mobility mission at JB-MDL to continue without major disruptions as the Joint Base receives the new Boeing KC-46 tankers in the years ahead. We should see the first of 24 new aircraft in late 2021.”

   The NDAA also restricts the premature retirement of KC-135 Stratotankers—such as operated by the New Jersey National Guard—from retiring. “The missions of the active duty 305th Air Mobility Wing and its sister Air Force Reserve 514th Air Mobility Wing, as well as the NJ Air National Guard’s 108th Air Refueling Wing, have never been more important,” Smith said.

      Smith noted the bill authorizes construction of two key military projects at JB-MDL located in part in his congressional district:

·         $22 million for the Air Force for a much-needed Munitions Storage Area

·         $15 million for the New Jersey National Guard to build a National Guard Readiness Center to help with deployments of Guard members from the base.

   The bill also addresses key military challenges including suicide prevention in the ranks and sexual assault and harassment and it improves information sharing on human trafficking activities to counter this heinous crime.  The bill also provides 3 percent raises for all military personnel and hazard duty pay for certain deployments and combat. 

The 2021 NDAA also

·         initiates mental healthcare reforms for service-members, family members and retirees and seeks to improve the effectiveness of DoD’s suicide prevention programs.

·         addresses sexual assault and harassment in the military with reforms designed to improve reporting, improve and protect the rights of victims, and provide for more effective responses for sex-related offenses.

·         authorizes improvements to Military Family Housing with long overdue upgrades to identification and remediation of severe environmental hazards, and support for families displaced for mold and other hazards.

·         provides reforms for military families, including childcare shortages, reforms to programs that support military families with children with special needs.

·         ensures service members have the diagnostic equipment, testing capabilities and PPE they need, along with providing medical surge capacity, and health benefits to members of the National Guard that supported the COVID-19 response.

·         improves U.S. coordination and information-sharing to combat international human trafficking and reauthorizes a stronger, survivor-led U.S. Advisory Council on Human Trafficking.

·         strengthens tools to combat money laundering and the financing of terrorist programs.

   The author of the recently House-passed Hong Kong Human Rights and Democracy Act and Ranking Republican on the U.S. Congressional-Executive Commission on China also highlighted key NDAA provisions that protect the U.S. from Chinese military and cyber threats and U.S. interests in promoting and protecting democracy around the world. 

       “Specifically, the bill expands the prohibition on DoD acquiring certain sensitive materials from China, or certain printed circuit boards from China,” Smith said.  “It also requires a report on the vulnerabilities to the medicine supply chain of the United States from foreign nations like China, and a Presidential assessment on how to deter Chinese industrial espionage and large-scale cyber theft of intellectual property and personal information. The NDAA also requires public reporting of Chinese military companies operating in the United States and for that list to be published on the Federal Register.

        “On human rights issues, democracy and the rule of law, President Xi is in a race to the bottom with North Korea,” said Smith, noting that for over 30 years, “I have pushed back on the fantasy notion that trade with China—in reality, a gutting of American manufacturing and a wholesale transfer of intellectual property—would somehow improve China’s behavior. It just didn’t happen.”