FTC has ‘plausible claim’ Facebook is illegal monopoly, judge says

A worker picks up trash in front of the new logo outside Meta's headquarters on October 28, 2021, in Menlo Park, Calif.
Enlarge / A worker picks up trash in front of the new logo outside Meta’s headquarters on October 28, 2021, in Menlo Park, Calif.

Justin Sullivan / Getty Images

The Federal Trade Commission antitrust lawsuit against Facebook may continue, a federal judge has ruled. The company had filed a motion to dismiss, which the judge dismissed.

U.S. District Judge James Boasberg had urged the FTC to reclassify the case after rejecting its first attempt when he found it missing. “Second time lucky?” Boasberg wrote in the opinion yesterday. Apparently.

“The basic theory of the trial remains essentially unchanged,” he said of the FTC reclassification. “The facts alleged this time around to reinforce those theories, however, are much more solid and detailed than before, particularly with regard to the contours of the defendant’s alleged monopoly.”

The FTC maintains that Facebook (now known as the Meta) used a “buy and bury” strategy to stifle competition in the social media space. Specifically, he alleges that Facebook bought both Instagram and WhatsApp to prevent them from offering their large user bases new features that could have challenged Facebook’s main platform.

“Clear the bar”

Boasberg found that the FTC “cleared the moot bar” and the bar for the “purchase and burial” allegations. In support of these claims, he cites the fact that Facebook initially considered competing directly with Instagram before deciding to simply acquire the app, a move that reduced competition in the market. The “FTC’s allegations that Facebook downsized and ultimately shut down its own mobile sharing app after Instagram’s acquisition is consistent with the claim that consumers would have a choice between a better and larger service market if the acquisition never took place, ”he wrote.

The judge also pointed out that Facebook had followed the same path in the face of competition from WhatsApp. The company “briefly tried to compete” with WhatsApp before deciding to buy it, he said.

Boasberg also noted that Zuckerberg wrote in 2012 that he was “most worried about the messages.” WhatsApp is already ahead of us in messaging the same way Instagram was “ahead” of us in photos… I would pay $ 1 billion for them if we could get them. Two years later, Facebook bought the messaging company for $ 19 billion.

Hits and misses

But while the FTC was successful in securing the “buy and bury” demand, it failed to convince the judge to act on his other allegation, which was that Facebook used its policies to stifle competition by restricting it. ‘access to its APIs. There were some issues with the agency. approach – first, Boasberg did not invite the FTC to re-file these allegations, and second, the judge pointed out that Facebook had abandoned the policies in 2018 and had not implemented them since 2013. The judge noted that in it cases, the FTC does have the legal authority to sue Facebook on the basis of past conduct.

Facebook had also requested the recusal of FTC President Lina Khan because she claimed she came into office with pre-existing views on the company’s behavior. Here, Boasberg sided with the FTC, saying “such a claim misses its mark because Khan was acting as a prosecutor, as opposed to a judicial role, in the ballot” to prosecute antitrust charges against Facebook.

In Boasberg’s opinion, there is some information to suggest that he might keep an open mind when assessing Facebook’s alleged anti-competitive behavior and whether it has affected consumers. “The advent of federal legislation addressing various privacy and advertising concerns related to consumer technology is consistent with the intuitive notion that consumers care about these issues and may prefer more stringent protections in their lives. [social networking] services, ”he wrote.

In other words, the mere fact that Congress is debating such legislation suggests that the public cares about these issues, even as people continue to use Meta’s products.


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