Supreme Court Ruling Requires Dismissal Of FTC's Antitrust Case, Facebook Says

Last week, the Supreme Court sharply curtailed the Federal Trade Commission's ability to seek court orders against companies the agency believes have violated the law.

Facebook is now calling a federal judge's attention to last week's ruling, arguing that it requires dismissal of the FTC's antitrust lawsuit, which seeks to force Facebook to divest Instagram and WhatsApp.

“The Supreme Court’s decision and its reasoning support Facebook’s argument that the FTC’s suit improperly circumvents limits on its authority,” the company writes in papers filed this week with U.S. District Court Judge James Boasberg in Washington, D.C.

The new papers come in a battle dating to December, when the FTC alleged in an antitrust suit that the company systematically eliminated rivals -- including by purchasing Instagram for $1 billion in 2012, and WhatsApp for $19 billion in 2014.



Facebook recently urged Boasberg to dismiss the lawsuit for several reasons, including that the FTC didn't object to the acquisitions when they occurred. The company also argued the agency lacked authority to seek an injunction over conduct that occurred in the past.

On Tuesday, Facebook reiterated that point -- this time with ammunition from the new Supreme Court decision interpreting the agency's authority.

The Supreme Court specifically said in last week's ruling that the agency can't seek monetary restitution under Section 13(b) of the FTC Act. That section -- which deals with the FTC's ability to obtain injunctions against companies -- is what the agency drew on in its complaint against Facebook. The Supreme Court also suggested in its ruling that the FTC can't seek injunctions under Section 13(b) to remedy prior conduct.

“Taken as a whole, the provision focuses upon relief that is prospective, not retrospective,” Justice Stephen Breyer wrote last week, referring to Section 13(b).

Instead, he suggested the FTC should deal with a company's past conduct through administrative proceedings -- which are typically time-consuming -- before going to federal court.

Facebook now contends that Breyer's opinion stripped the agency of authority for its antitrust case.

“The FTC has not properly invoked Section 13(b) because it has alleged no imminent or ongoing antitrust violation, only conduct that took place years ago,” Facebook writes in its new papers. “The FTC therefore has not alleged that Facebook 'is violating, or is about to violate,' the antitrust laws and thus lacks authority to proceed in this court.”

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