A federal judge ruled on Tuesday that the U.S. Federal Trade Commission (FTC) can proceed with an antitrust lawsuit against Meta, formerly known as Facebook, after dismissing the case in June last year.
District of Columbia Judge James Boasberg said in a memorandum opinion that the FTC’s first complaint had “stumbled out of the starting blocks,” noting that the court had concluded last year that the commission had failed to plausibly allege “that Facebook has monopoly power in the market for Personal Social Networking (PSN) services.”
However, the court had in 2021 “left the door open” for the agency to amend the complaint and reinstate its suit, which it did.
“Eagerly accepting such invitation, the FTC has filed an amended complaint containing significant additions and revisions aimed at addressing the shortcomings identified in the Court’s prior opinion,” Judge Boasberg, an Obama appointee, said on Tuesday.
That revised version, Boasberg said, makes the same arguments as the prior suit but this time with enough alleged facts “to plausibly establish that Facebook exercises monopoly power in the market for PSN services.”
The FTC has also “adequately alleged that the company’s dominant market share is protected by barriers to entry into that market” and “explained that Facebook not only possesses monopoly power but that it has willfully maintained that power through anticompetitive conduct—specifically, the acquisitions of Instagram and WhatsApp.”
However, judge Boasberg said that the court will not allow the FTC to move forward with its allegations regarding Facebook’s interoperability policies, also known as the platform policies, because the company abandoned those policies in 2018.
“Facebook nonetheless moves to dismiss once again, contending that the FTC’s latest effort is akin to rearranging the deck chairs on the Titanic. Although the agency may well face a tall task down the road in proving its allegations, the Court believes that it has now cleared the pleading bar and may proceed to discovery,” Boasberg said.
The FTC filed its antitrust lawsuit against Meta last year alleging that the social technology company holds an unlawful monopoly in personal social networking services, an alleged 60 percent of the social media networking market, and maintained it by acquiring the competitors Instagram and WhatsApp.
Boasberg on Tuesday also pointed to Meta’s new allegation that FTC Chair Lina Khan, a fierce tech critic, allegedly invalidated the complaint by prejudging Meta’s guilt and that her participation in a vote to authorize the amended complaint violated federal law due to her previous extensive work on antitrust issues regarding major technology platforms.
“Although Khan has undoubtedly expressed views about Facebook’s monopoly power, these views do not suggest the type of ‘axe to grind’ based on personal animosity or financial conflict of interest that has disqualified prosecutors in the past,” the judge wrote.
The FTC suit against Meta comes as the U.S. government attempts to reign in the power of big tech. Last year, the Justice Department sued Google over allegations that the tech giant used its power to preserve its monopoly.
In a lawsuit filed in a Washington federal court, the DOJ claimed that Google had tried to maintain its status as a gatekeeper to the Internet by using a number of interlocking businesses to shut out competitors, thereby securing itself as a monopoly. The DOJ claimed the Silicon Valley firm uses billions of dollars from its own advertisements to pay carriers, browsers, phone companies, and other entities to maintain Google as a default search engine.
Google has disputed that claim.
Responding to Boasberg’s ruling on Tuesday, a Meta spokesperson told The Verge, “Today’s decision narrows the scope of the FTC’s case by rejecting claims about our platform policies. It also acknowledges that the agency faces a ‘tall task’ proving its case regarding two acquisitions it cleared years ago. We’re confident the evidence will reveal the fundamental weakness of the claims. Our investments in Instagram and WhatsApp transformed them into what they are today. They have been good for competition, and good for the people and businesses that choose to use our products.”
The Epoch Times has contacted Facebook and the FTC for comment.