(1) The #FTC and 40+ states sued #Facebook this week alleging anticompetitive behavior. Lawsuit here: https://ag.ny.gov/sites/default/files/facebook_complaint_12.9.2020.pdf

(2) @NYTimes article by @ceciliakang and @MikeIsaac: https://www.nytimes.com/2020/12/09/technology/facebook-antitrust-monopoly.html

(3) My thoughts: this is reminiscent of the equally flimsy govt #antitrust case against #google – thoughts here: https://twitter.com/spencerrascoff/status/1328763240663326720

(4) The govt claims that #Facebook’s acquisitions of #WhatsApp, #Instagram and other companies are anticompetitive. As in the Google case, they do a weak job demonstrating alleged harm to consumers or competitors.

(5) But more fatal to the case than its lack of demonstrable harm is the absurd notion that we should reopen acquisitions which were legally approved by US government regulators years afterwards.

(6) Businesses rely on the government to establish ground rules for operating. In the case of acquisitions, those rules are clear. M&A needs to be approved prior to closing by regulators – DOJ, FTC, CFIUS, etc.

(7) We have a good system for govt review of M&A – HSR reviews, etc. When the govt (FTC or DoJ) decides not to sue to block a deal, and it closes, it is closed.

The government doesn’t get a do-over years later if they don’t like how things turned out after they approved a deal.

(8) Should we now reopen the govt's approval of #Disney’s acquisition of CapCities ABC in 1995 now that Disney owns #Fox and is therefore a “monopoly”?
Should we reopen Google’s 2007 acquisition of Doubleclick? How about #Zillow’s (FTC approved!) 2015 acquisition of #Trulia?

(9) For FTC to ask Courts to unwind acquisitions which it & other regulators approved years ago would be to create an impossible landscape for Boards & management to navigate. How could you do M&A (not to mention co. integration) if you don’t know if a deal will be unwound later?

(10) If the government wants to go after #Facebook for #antitrust issues, that’s fine. But if after years of investigations all they can point to is acquisitions which the govt had previously approved, then they should either keep looking or move on.

(11) It’s unprecedented for the govt to sue to unwind a merger years after its closing, and if the courts side with the FTC on this it will be extremely problematic for companies.

(12) My prediction: this will take 2-3 years to make its way through the courts, including possibly appeals to SCOTUS. Facebook will eventually win, and no divestiture of Insta or WhatsApp will occur.

(13) The biggest risk to $FB through this process is the distraction and the “chilling effect” the lawsuit will have on its innovation, and the impact on employee morale and innovation. The $MSFT case in the 90s shows how harmful a lawsuit like this can be.

(14) Finally, a reminder that “bad documents” are to be avoided at all costs. Avoid writing words like “squash”, “crush”, “destroy”, “competitor”, “monopolize” etc. in all emails and texts or you might live to regret it!