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Facebook sued by FTC, 48 state attorneys general

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Yahoo Finance’s Alexis Christoforous and Dan Howley discuss the latest suit against Facebook.

Video Transcript

ALEXIS CHRISTOFOROUS: All right, Facebook's antitrust fight started today. More than 40 attorneys general and the Federal Trade Commission have filed long-awaited lawsuits, accusing Facebook of illegal anti-competitive tactics. The focus, here, on Facebook's acquisition of Instagram and WhatsApp. Our tech editor, Dan Howley, is joining us now for more. So Dan, what do we know about this?

DAN HOWLEY: Yeah, this is a wide-ranging antitrust lawsuit against Facebook from 48 state attorneys general, as well as the FTC's own suit. And I just want to go ahead and read a statement from New York attorney general Letitia James-- she's the one leading the suit. She said, no companies should have this much unchecked power over our personal information and our social interactions, and that's why we are taking action today, and standing up for the millions of consumers and millions of small businesses that have been hurt by Facebook's illegal behavior.

Now, the FTC suit, meanwhile, is actually going further than the state attorneys general. In their own statement, they say that they are seeking permanent injunctions in federal court that could, among other things, require divestitures of assets, including Instagram and WhatsApp. So essentially, what the FTC is saying here is that they would like to see Facebook broken apart-- the three disparate parts of it-- Facebook, Instagram, and WhatsApp separated into different companies.

But they say that they are seeking that, and that it could do that, not necessarily that that's what will happen. And the experts that we've spoken to throughout the past two years have said that that's unlikely to happen. It's more-- more likely that we'll see some kind of statement coming from this that Facebook has to move ahead and clear any future mergers with the FTC, or some kind of development along those lines.

But obviously, this is a huge, huge issue for Facebook. The stock is obviously reacting to this, as well. And Facebook is just the second company now to face these kinds of lawsuits. We have Google's parent, Alphabet, already facing its own antitrust lawsuit, and Amazon and Apple are expected to get hit by similar suits in the future.

ALEXIS CHRISTOFOROUS: All right, we're going to leave it there. We see the stock down nearly 3% right now. Dan Howley, thanks for bringing that breaking news to us.