WASHINGTON — The Federal Trade Commission on Thursday launched a new target on Facebook, bolstering its allegations that the company was a monopoly illegally crushing competition in an attempt to overcome the skepticism of a federal judge who dismissed the agency’s original case. rejected months ago.
The lawsuit filed Thursday contains the same general arguments as the original, namely that Facebook’s acquisitions of Instagram and WhatsApp were made to create a “moat” around its monopoly on social networks. But the updated suit is nearly twice as long and includes more facts and analysis that the agency says better support the government’s allegations.
“Facebook lacked the business acumen and technical talent to survive the transition to mobile,” Holly Vedova, the agency’s acting director of competition at the agency, said in a statement. “After Facebook failed to compete with new innovators, Facebook illegally bought or buried them as their popularity became an existential threat.”
Facebook responded on Twitter: “We are reviewing the FTC’s amended complaint and will have more to say shortly.”
The agency had to resubmit the case after the overseeing judge said in June the government had not provided enough evidence that Facebook had a monopoly on social networks. The judge’s decision, and a similar one he made in a case brought against the company by more than 40 states, dealt a stunning blow to regulators’ efforts to rein in Big Tech.
His decision was the first major test for FTC chairman Lina Khan, who had only been in her role for a few days at the time. Ms Khan represents a wave of new thinking about the industry among government officials and many lawmakers, arguing that the government needs to act much more aggressively to stem the power of tech giants such as Facebook, Google, Amazon and Apple. President Biden has appointed several regulators with similar goals, and lawmakers have proposed updates to antitrust laws to address the power of tech companies.
Criticism of the first draft of the Facebook case by judge James E. Boasberg of the District Court of the District of Columbia showed the major challenges regulators face. While the companies dominate the markets in which they operate – social media, in the case of Facebook – the courts often look at whether prices are rising as an indication of monopolization. Facebook’s most popular services are free.
“Nobody who hears the title of the 2010 film ‘The Social Network’ wonders what company it is about,” Judge Boasberg wrote. “But whatever it may mean to the public, ‘monopoly power’ is an art term under federal law with precise economic meaning.” He instructed the FTC to back up claims that Facebook controlled 60 percent of the “personal social networking” market and that it was blocking competition.
Ms Khan then faced the choice of how to deal with Judge Boasberg’s decision. One option was to drop the case entirely, while another was to expand it to include even broader allegations. Instead, she took more of a middle ground by resubmitting the process with more detail and a more comprehensive story of the company and what the agency says has been a pattern of anticompetitive behavior since Mark Zuckerberg co-founded it at Harvard in 2004.
