In December, grey clouds loomed over Facebook HQ as the Federal Trade Commission, together with 46 state prosecutors and the District of Columbia and Guam, sued the social network, citing that it had illegally hoovered up rival companies in an aggressive attempt to stamp out competition.

Facebook has used its dominance and monopoly power to crush smaller rivals

 and snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James, on behalf of the coalition that has filed the landmark lawsuit. “By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived to be potential threats.”

This comes as the microscope zooms further in on ‘big tech’, with Google, for instance, recently landing in the cross hairs of the Justice Department, having been charged for unlawfully maintaining its monopoly over online advertising and searching. Moreover, when speaking to 

 at the beginning of 2020, president-elect Joe Biden said that he would revoke Section 230, a major piece of internet legislation which prevents social media platforms from being liable for illegal or offensive content posted by users.

For too long the FTC — whose task is to protect “consumers by stopping unfair, deceptive or fraudulent practices in the marketplace” — has shirked its responsibility of checking the growth of tech behemoths and imposing meaningful, significant action on them when it’s been required.

But, now, following an 18-month-long investigation, regulators are calling for “the divestiture or restructuring of illegally acquired companies”, or, in other words, for Mark Zuckerberg to separate Facebook — which has amassed well over two billion users since its founding, in 2004 — from its prized assets: the photo-sharing app Instagram, bought for $1bn, in 2012, and instant-messaging platform WhatsApp, which was swallowed up two years later, in a deal that has remained Facebook’s biggest purchase to date, having cost $19bn. A penalty of this level is one of the severest that can be slapped down in such cases.

The move, which was filed in the US District Court for the District of Columbia, has received bipartisan backing. While Republican Ken Buck, of Colorado, Tweeted, “Big Tech’s reckoning has just begun,” Democrat Richard Blumenthal, a Senator of Connecticut, said: “Facebook’s reign of unaccountable, abusive practices against consumers, competitors and innovation must end.”

Facebook, however, denies any wrongdoing and will not acquiesce easily, arguing that relevant antitrust officials reviewed and subsequently did nothing to prevent the deals at the time. A “second request” to look into information related to the proposed Instagram deal was undertaken by the Federal Trade Commission, before the purchase was eventually given the green light; likewise, the European Commission reviewed the WhatsApp transaction and cleared the deal unconditionally.

The government now “wants a do-over” and “has announced that no sale will ever be final, no matter the resulting harm to consumers or the chilling effect on innovation,” Facebook vice president and general counsel Jennifer Newstead fired back in an official statement, labelling the suits as “revisionist history”.

There is little doubt that deep-pocketed Facebook will weather the showering of legal bullets — which is set to play out in court for years — as its earnings of around $20bn dwarfs the FTC’s $330m budget. Its defence won’t be easy to tear apart, either.

In 2019, Zuckerberg saw Elizabeth Warren’s plans to dismantle Facebook as an “existential” threat. There is little doubt that the 36-year-old will use this argument in the current legal case which is attempting to undo the West Coast giant — and there may be some substance to this outlook, as the unravelling of a merger could cause panic in the wider business world, illustrated by the fact that it has been almost four decades since AT&T was forced to offload its assets, in the last renowned antitrust lawsuit which concluded in such action. Ostinatos of this ilk have failed to materialise, due largely to the unknown consequences and uncertainties that dispossession could cause. “Courts historically have expressed anxiety about doing it [unravelling established mergers],” said William Kovacic, a one-time chairman of the Federal Trade Commission.

Prosecutors will also have to mount a sound legal case to prove that Facebook’s sole intention during the deals was to kill off competition. But what regulators may call exploitative tactics, Facebook will deem as astute and necessary business, and an act of defence rather than offence — the fact it was willing to shell out double the value of what Instagram was then worth (at the time, a funding round valued it at $500m) perhaps indicates that it was trying to prevent another major rival, such as Twitter or Microsoft, companies which are far from defunct, from swooping in on Instagram.

Officials will also have to prove the hypothetical: that things would have been better had the acquisitions not materialised. Zuckerberg and co. will have a deep well of facts and stats that will argue such actions were far from shotgun marriages and that, in actuality, Facebook has channelled a hinterland of resources towards growing and developing Instagram and WhatsApp into two of the world’s most prominent and useful tools for communication.

In 1998, in one of the few instances in which officials took major action on a big tech name, when Microsoft was sued for allegedly killing off rivals in a non-lawful way, the software giant avoided a breakup. Facebook will hope for the same result.

But will Zuckerberg face such an outcome? Flutters should be avoided at this point. But one result that might come out of these cases — whether Facebook is protected or not — may be that ‘big tech’ will no longer be able to throttle smaller ventures. Or perhaps, at the very least, future acquisitions will be scrutinised more exhaustively. Either way, restrictions to curb anti-competitive, predatory business will surely make way for further creativity and restore competition.

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