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1

ID: 223642

URL: https://arstechnica.com/tech-policy/2022/01/facebook-loses-bid-to-kill-ftc-antitrust-lawsuit/

Date: 2022-01-12

FTC has a “plausible claim” that Facebook is an illegal monopoly, judge says

Judge says the FTC has cleared the bar with its new filing. The Federal Trade Commissions antitrust suit against Facebook may proceed, a federal judge has ruled. The company had filed a motion to dismiss the case, which the judge denied. US District Judge James Boasberg had invited the FTC to refile the case after throwing out its initial attempt when he found it lacking. Second time lucky? Boasberg wrote in yesterdays opinion. Apparently. The FTC argues that Facebook (now known as Meta) used a buy and bury strategy to stifle competition in the social networking space. Specifically, it alleges that Facebook purchased both Instagram and WhatsApp to prevent them from offering their large user bases new features that could have challenged Facebooks main platform. Boasberg found that the FTC cleared the pleading bar and the bar for the buy and bury allegations. In support of those claims, he cites the fact that Facebook had initially considered competing directly with Instagram before deciding to simply acquire the app, a move that reduced competition in the marketplace. The FTCs allegations that Facebook scaled down and eventually shuttered its own mobile-sharing app after acquiring Instagram is consistent with the assertion that consumers would have a better and broader market of services to choose from had the acquisition never occurred, he wrote. The judge also pointed out that Facebook followed the same path when faced with competition from WhatsApp. The company briefly attempted to compete with WhatsApp before deciding to buy it, he said.   But while the FTC succeeded with the buy and bury" claim, it failed to get the judge to proceed with its other allegation—that Facebook used its policies to stifle competition by restricting access to its APIs. There were a few problems with the agencys approach—one, Boasberg did not invite the FTC to refile those allegations, and two, the judge pointed out that Facebook dropped the policies in 2018 and had not enforced them since 2013. The judge noted that in this instance, the FTC doesnt have statutory authority to go after Facebook based on past conduct. Buried in Boasbergs opinion are a few tidbits that suggest he might keep an open mind when assessing Facebooks alleged anticompetitive 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 stronger protections in their [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 Metas products.