SAN FRANCISCO (Reuters Breakingviews) - Facebook faces two judgments in its U.S. antitrust battle – a legal one, and another in the court of public opinion. A multi-state lawsuit against the $807 billion social network launched on Wednesday could drag on for years. Meanwhile what matters most is ensuring that the company’s 3.2 billion users remain mostly unfazed. Attorneys general for nearly every U.S. state, along with the Federal Trade Commission, all challenged Facebook’s history of acquiring companies, which they claim was a muzzle on competition. New York’s top prosecutor Letitia James said Facebook engaged in a “buy or bury” strategy when it bought Instagram in 2012 and WhatsApp in 2014. The most extreme outcome could be a forced breakup. But the bar is pretty high. That kind of challenge typically has to prove an acquired firm was a significant rival instead of a nascent one and judges have been reluctant to unwind deals that occurred long ago. A fine is possible too, though Facebook has almost $56 billion of cash at its disposal. How Facebook users react to slings and arrows has more short-term impact. So far, they don’t seem to care. Facebook’s third-quarter revenue grew by a solid 22% year-on-year while monthly active users for its family of apps increased by 14%. An ad boycott in the summer failed to do much damage. To keep things that way, Facebook’s best bet is to make sure boss Mark Zuckerberg himself doesn’t become too much of a target. When Microsoft faced antitrust probes in the late 1990s, co-founder Bill Gates was combative and evasive under questioning – claiming memory lapses and splitting hairs with prosecutors. Microsoft staved off a breakup, but ended up settling and sharing its technology; Gates stepped down as chief executive in 2000. The Facebook chief also has vulnerabilities. At a July congressional hearing, lawmakers brought up emails from 2012 in which Zuckerberg noted that “Instagram can hurt us,” and others that showed app executives fretted that Facebook would go into “destroy mode” if they didn’t sell. He can’t take those back, but he can avoid doubling down, or provoking politicians further. Facebook starts with an advantage, at least: anti-competitive or not, billions of users are still happily hooked on its service. Preserving that by keeping a low profile is the best thing Zuckerberg can do for himself and his fellow shareholders.
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