Facebook Critics Cheer FTC's New Antitrust Case

The Federal Trade Commission's decision to revise its antitrust claims against Facebook is drawing praise from some of the company's biggest critics, including watchdogs like Public Citizen and lawmakers like Senator Amy Klobuchar.

“Facebook’s long history of anticompetitive behavior is no secret,” Klobuchar, a Democrat from Minnesota, stated Thursday morning, shortly after the FTC officially amended its complaint against the social networking platform. “Big technology companies like Facebook should not have free reign to impose their will on the market, and they must be held accountable when they attempt to do so.”

Alex Harman, competition policy advocate for Public Citizen, added that the FTC's decision to renew its complaint “should be a message to Facebook and other monopolists that there is a new sheriff in town and the party is over.”

But not everyone is cheering on the new sheriff. The tech-funded group Chamber of Progress contends that the new complaint won't get any further than the first one -- which was dismissed by a federal judge in June.

“The FTC is making the same mistake all over again, by failing the very first step of clearly and credibly defining Facebook’s market,” Chamber of Progress CEO Adam Kovacevich stated. “It claims that Facebook and Instagram compete only against Snapchat -- but not Twitter, LinkedIn, or TikTok -- and actually concedes that WhatsApp didn’t compete against Facebook.”

The new complaint, like the original, focuses 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 argues that Facebook purchased both companies in order to fend off potential competition.

“By acquiring Instagram, Facebook neutralized Instagram as an independent competitor” the FTC alleges in an amended complaint filed Thursday with U.S. District Court Judge Robert Boasberg in Washington, D.C. “As with Instagram, Facebook decided to acquire WhatsApp rather than compete with it, in an effort to neutralize a significant competitive threat to its personal social networking monopoly.”

The FTC voted 3-2 to file the new complaint.

Earlier this year, Facebook argued that lawsuit should be dismissed for several reasons, including that the FTC cleared both purchases before they were finalized. The company also questioned the premise that "personal social networking" is a distinct market, and argued it faces stiff competition for online ad dollars. 

“The FTC’s one-count monopolization case against Facebook utterly ignores the reality of the dynamic, intensely competitive high-tech industry in which Facebook operates,” the company wrote in March, when it filed a motion to dismiss the FTC's prior complaint.

When Boasberg tossed the FTC's original case, he wrote that the allegations, even if proven true, wouldn't show that Facebook monopolized the market for so-called “personal social networking services.”

Boasberg added that the original complaint lacked concrete information about how much power Facebook had in the “personal social networking services” market.

In its new 80-page complaint, the FTC writes at length about the differences between various social networking services, obviously hoping to convince the judge that Facebook is qualitatively different from other social platforms.

“Personal social networking is distinct from, and not reasonably interchangeable with, online services that focus on the broadcast or discovery of content based on users’ interests rather than their personal connections,” the FTC writes.

The agency goes on to argue that other social media services -- including Twitter, Reddit and TikTok -- don't compete with Facebook.

“Twitter focuses on enabling users to stay informed about topics that interest them, while Reddit facilitates conversations centered around topics of interest to the participants,” the agency says in the new complaint. “As a result, users employ these services primarily to stay informed about and discuss events relevant to their interests (e.g., Twitter), or engage in conversations with communities of mostly anonymous people who share a particular interest (e.g., Reddit), rather than to connect with friends, family, and other personal connections.”

The FTC adds: “TikTok users primarily view, create, and share video content to an audience that the poster does not personally know, rather than connect and personally engage with friends and family.”

For its part, Facebook describes the amended complaint as “an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final.”

The company adds: “Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful.”

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