US watchdog pokes Facebook a second time: Meta faces fresh monopoly lawsuit
If at first you don't succeed, you're probably the FTC
The Federal Trade Commission’s antitrust complaint that Facebook, er, Meta operates as a monopoly will be heard by the courts after the US watchdog's initial lawsuit was dismissed.
In December 2020, the FTC accused Meta of "illegally maintaining its personal social networking (PSN) monopoly through a years-long course of anticompetitive conduct." It threatened to break up the mega-corporation and undo its acquisitions Instagram and Whatsapp.
This legal challenge fell flat, however, when judges threw the case out six months later. Evidence supporting the idea it unlawfully dominated social media was said to be lacking though the regulator was given another chance to file an amended lawsuit. A federal judge has now agreed to hear the case this time.
“First, the FTC has now alleged enough facts to plausibly establish that Facebook exercises monopoly power in the market for PSN services,” Judge James Boasberg ruled [PDF] this week.
“Second, it has adequately alleged that the company’s dominant market share is protected by barriers to entry into that market. Third, the agency has also explained that Facebook not only possesses monopoly power, but that it has willfully maintained that power through anticompetitive conduct — specifically, the acquisitions of Instagram and WhatsApp.”
The amended lawsuit brings up pretty much the same allegations as the first lawsuit. It claims Meta has been operating as a monopoly for years with Instagram and Whatsapp under its belt, and that it has enforced anticompetitive practices to deter or thwart rivals.
Judge Boasberg, however, dismissed some of the FTC’s claims. Meta’s “interoperability policies” that prevented developers from connecting with its platform was abandoned in 2018.
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Meta's lawyers meanwhile claimed FTC chairwoman Lina Khan's vote to approve the amended complaint should be nulled due to her past work advising Democrat House reps on antitrust and Big Tech.
Five FTC commissioners including Khan voted whether to submit an amended complaint or not; it passed 3-2. Meta claimed Khan had “an ‘axe to grind’ against the defendant or [is] not otherwise impartial” given the views articulated in her past work. Put simply, she is a major critic of today's internet giants and their reach and power.
But Judge Boasberg disagreed. "Although Khan has undoubtedly expressed views about Facebook’s monopoly power, these views do not suggest the type of 'axe to grind; based on personal animosity or financial conflict of interest that has disqualified prosecutors in the past. Instead, Khan was said to be was acting in a prosecutorial capacity, as opposed to in a judicial role when she cast her vote."
A Meta spokesperson made the best of it.
“Today’s decision narrows the scope of the FTC’s case by rejecting claims about our platform policies," a Meta spokesperson told The Register in a statement.
"It also acknowledges that the agency faces a ‘tall task’ proving its case regarding two acquisitions it cleared years ago. We’re confident the evidence will reveal the fundamental weakness of the claims. Our investments in Instagram and WhatsApp transformed them into what they are today. They have been good for competition, and good for the people and businesses that choose to use our products.” ®