FTC Can Proceed With Antitrust Claims Against Facebook

In a blow to Facebook, a federal judge has rejected the company's request to throw out antitrust claims brought by the Federal Trade Commission.

“The FTC has plausibly alleged that Facebook maintained a dominant share of the U.S. personal-social-networking market since 2011,” U.S. District Court Judge James Boasberg in Washington, D.C. said in a 48-page opinion issued Tuesday.

The decision paves the way for the FTC to move forward and obtain evidence from Facebook (recently re-named Meta) -- but doesn't suggest that the agency will prevail with its claims.

“Ultimately, whether the FTC will be able to prove its case and prevail at summary judgment and trial is anyone’s guess,” Boasberg wrote.

The decision comes in a legal battle dating to December of 2020, when the FTC alleged that Facebook violated antitrust laws by acquiring potential competitors. The complaint largely centered 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.

The agency now contends the acquisitions were part of an illegal “buy-or-bury scheme” that allowed Facebook to maintain its dominance in the “personal social networking market.”

Last year, Boasberg dismissed an earlier version of the FTC's case, ruling that its allegations, even if proven true, wouldn't establish that Facebook held market power over personal social-networking services.

Boasberg said at the time that the complaint lacked concrete details about Facebook's market power. He 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.

In August, FTC filed an amended complaint that included more detailed allegations about Facebook's metrics. Among others, the FTC said more than 200 million people in the U.S. visited Facebook in every month of 2020, while more than 138 million in the country visited Instagram, according to Comscore data.

The agency also alleged that from September of 2016 through December of 2020, Facebook's share of daily active users “among apps providing personal social networking services in the United States averaged 80% per month for smartphones, 86% per month in tablets, and 98% per month for desktop computers,” based on Comscore data.

Boasberg found the FTC's new allegations, including specific assertions about metrics, were sufficient to warrant further proceedings.

“In stark contrast with its predecessor, this complaint provides reinforcing, specific allegations that all point toward the same conclusion: Facebook has maintained a dominant market share during the relevant time period,” he wrote.

Facebook had argued the lawsuit should be dismissed for several reasons, including that its purchases of Instagram and WhatsApp benefited consumers.

“The FTC challenges acquisitions that the agency cleared after its own contemporaneous review and that resulted not in harm but product improvements, price cuts, and dramatic output expansion to the benefit of many millions of U.S. consumers," Facebook wrote in papers filed with Boasberg in August. 

The FTC was divided along party lines over whether to proceed with an amended complaint against Facebook, with both Republican commissioners voting against continuing the case. 

"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," Commissioner Christine Wilson stated in a written dissent.

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