Court Denies Meta’s Request to Dismiss FTC Antitrust Suit

Score one for the Federal Trade Commission in its ongoing antitrust lawsuit against Meta, as U.S. District Court Judge James Boasberg denied the company’s second motion to dismiss, filed last October, ruling that the case may proceed. Late last June, Boasberg dismissed separate antitrust lawsuits filed against Facebook by the FTC and 48 state attorneys general in December 2020, giving the FTC 30 days to amend its lawsuit—an extension was granted later—and dismissing the suit by the attorneys generals altogether. Boasberg said at the time that he was looking for a metric or more detail about how to determine if Facebook is a monopoly. The FTC alleged that Facebook “maintained a dominant share of the U.S. personal social networking market (in excess of 60%)” since 2011, but this was too light on detail for the judge. Then-Facebook claimed at the time that there was no factual basis for the FTC’s allegations that it has a dominant share of the personal social networking services market, accusing the agency of relying on commercial data on usage of three “cherry-picked” applications—Facebook, Instagram and Snapchat—and adding that the FTC had not presented any facts establishing that competitors to Facebook faced “barriers to entry.” The company also said the commission did not present facts demonstrating that it limited its ads output to cause its prices to rise above competitive levels, denying those allegations. The agency wrote in its amended complaint, filed last Aug. 19, “Facebook’s unlawful course of conduct to maintain its monopoly continues today and must be enjoined. Facebook continues to hold and operate the assets it acquired unlawfully and continues to keep them positioned to provide a protective ‘moat’ around its personal social networking monopoly. Moreover, Facebook continues to monitor competitive threats and will seek to acquire or kneecap them unless enjoined.” The FTC once again accused the company of resorting to “an illegal buy-or-bury scheme to maintain its dominance,” by unlawfully acquiring competitors with popular mobile features, as well as luring app developers to its platform and burying them when they became competitive threats. Boasberg wrote in an opinion released Tuesday that while the FTC’s initial complaint against Facebook "stumbled out of the starting blocks,” the revision was “far more robust and detailed than before," although he cautioned that the agency “may well face a tall task down the road in proving its allegations.” The judge added, “In stark contrast with its predecessor, this complaint provides reinforcing, specific allegations that all point toward the same conclusion: Facebook has maintained a dominant market share during the relevant time period … Facebook’s market share comfortably exceeds the levels that courts ordinarily find sufficient to establish monopoly power.” Meta also contended that current FTC chair Lina Khan should have been recused from the vote to authorize the amended complaint, as she was the author of a House Judiciary Subcommittee report asserting that Facebook violated Section 2 of the Sherman Act by maintaining an illegal monopoly. Boasberg rejected that allegation, saying that previous public criticism of the company by Khan did not suggest that she had an “ax to grind” and adding, “Although the court recognizes the importance of her vote, it is an exaggeration to treat Khan as the sole instigator of the current case.” Christopher Sgro of Meta’s policy communications and media relations team responded in a statement, “Today’s decision narrows the scope of the FTC’s case by rejecting claims about our platform policies. It also acknowledges that the agency faces a ‘tall task’ proving its case regarding two acquisitions it cleared years ago (Instagram and WhatsApp). We’re confident that 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.”