FTC Bulks Up Antitrust Complaint Against Facebook

The Federal Trade Commission on Thursday filed a revised, and significantly lengthier, antitrust complaint against Facebook, in an attempt to persuade a federal judge to allow the prosecution to proceed.

Facebook "unlawfully acquired innovative competitors with popular mobile features that succeeded where Facebook’s own offerings fell flat or fell apart," the agency stated Thursday in a post summarizing its new complaint. "Lacking serious competition, Facebook has been able to hone a surveillance-based advertising model and impose ever-increasing burdens on its users."

The move comes around seven weeks after U.S. District Court Judge Robert Boasberg in Washington, D.C. dismissed the agency's initial claims on the grounds that the allegations, even if proven true, wouldn't establish that Facebook held market power over personal social networking services.

The amended 80-page complaint spells out in greater detail why the FTC believes Facebook has monopoly power in that market.

But the gist of the complaint, as with the original 52-page lawsuit, centers on Facebook's purchases of social-media service Instagram (acquired for $1 billion in 2012) and messaging service WhatsApp (bought for $19 billion in 2014).

The FTC reviewed those deals when they were announced and allowed them to close.

Commissioner Christine Wilson, who dissented from the decision to sue Facebook, noted that the agency cleared the acquisitions years ago.

"I believe it is bad policy to undermine the integrity of the premerger notification process established by Congress and the repose that it provides to merging parties that have faithfully complied with its requirements," she stated.

When Boasberg dismissed the original complaint, he wrote that it “says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market.”

He also noted that even though the FTC alleged that Facebook commanded a market share of more than 60%, the agency didn't explain what it was measuring, and hadn't offered metrics -- such as ad revenue or time spent on the service by users -- to arrive at its conclusion.

Among other new allegations, the FTC says in the amended complaint that Facebook's share of time spent by users of apps providing personal social networking services in the U.S. has exceeded 80% since 2012.

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