WASHINGTON – The Federal Trade Commission took fresh aim at Facebook on Thursday, intensifying accusations that the company is a monopoly that has unlawfully crushed competition, in an attempt to outmaneuver. over the skepticism of a federal judge who issued the agency’s initial filing two months ago.
The lawsuit filed Thursday includes the same overall arguments as the original, saying that Facebook’s acquisitions of Instagram and WhatsApp were made to create a “moat” around its monopoly in the social network. society and thinks that this social network should be broken up. However, the updated case is nearly twice as long and includes more data and analysis that the agency says better supports the government’s allegations.
“Facebook lacks the business acumen and technical talent to survive the transition to mobile devices,” Holly Vedova, the agency’s acting competition director, said in a statement. “After failing to compete with new creators, Facebook illegally bought or buried them when their popularity became an existential threat.”
Facebook responded: “There is no valid claim that Facebook is a monopolist – and that does not change. Our Instagram and WhatsApp acquisitions were reviewed and deleted many years ago, and our platform policies are legit. “
The agency had to redo the case after the judge overseeing it said in June that the government had not provided enough evidence that Facebook was a monopoly in the social network. The judge’s decision, and a similar one he made in a lawsuit against the company brought by more than 40 states, dealt a blow to regulators’ efforts to rein in Big Tech.
His decision was the first major test for Lina Khan, the president of the FTC, who had only been in her role for a few days at the time. Ms. Khan represents a new wave of thinking about the industry among government officials and many lawmakers, arguing that the government needs to do more to stop the power of the public giants. technologies like Facebook, Google, Amazon and Apple. President Biden has appointed multiple regulators with similar goals, and lawmakers have proposed updating antitrust laws to target the power of tech companies.
Criticisms of the first version of the Facebook case, led by Judge James E. Boasberg of the District Court for the District of Columbia, highlight the major challenges that regulators face. Although companies dominate the markets in which they are present – social media, in the case of Facebook – courts often look at whether prices are rising as a sign of monopoly. Facebook’s most popular services are all free.
Judge Boasberg wrote: “No one who has heard the title of the 2010 film “The Social Network” will wonder which company it is about. “However, whatever it means to the public, ‘monopoly power’ is an artistic term under federal law with a precise economic connotation.” He instructed the FTC to back up the claims. claims that Facebook controls 60% of the market for the “personal social network” and that it has curtailed competition.
Ms Khan then faced a choice about how to handle Judge Boasberg’s decision. One option is to drop the case altogether, while another is to expand it with even broader accusations. Instead, she focused more, resubmitted the lawsuit with more detail and a more in-depth account of the company and what the agency says is a pattern of anticompetitive behavior since Mark Zuckerberg co-authored the lawsuit. founded at Harvard in 2004.
The amendment was approved by the committee in a 3-2 vote, with three Democrats on the committee voting in favor of it and two Republicans disagreeing.
In the new complaint, the FTC provides more details to support the government’s claims that Facebook has a monopoly in the social networking space. But the public version of the suit has had many statistics redacted because the numbers are proprietary.
The agency said Facebook – the company’s largest service, known as Facebook Blue – and Instagram were the top social networks in the US, far ahead of its next biggest competitor, Snapchat.
The agency refuted Facebook’s claims that it has many competitors in the social networking, instant messaging and entertainment sectors. The agency argues that Facebook’s products are intended for “personal social networks”, distinguishing them from specialized social networks such as professional network LinkedIn or the neighboring website NextDoor. The FTC added that Facebook’s products are also different from messaging services like Signal and iMessage because users generally don’t use those services to send notes to large groups, nor do they use the services. there to find contacts.
And the agency said Facebook is different from Twitter, YouTube and TikTok because the content on those pages is typically created for the public and not aimed at specific individuals within the social network.
“Facebook is today and has been since 2011, the dominant share of the relevant market for US personal social networking services, as measured using multiple metrics: time spent users, daily active users and monthly active users,” the agency said in its complaint.
The core argument of the FTC is that Facebook tried to maintain a monopoly on the social network through its acquisitions of Instagram in 2012 and WhatsApp in 2014. Slow in developing mobile apps, the company has seeks to “buy or bury innovators that threaten Facebook competition in the new mobile environment,” the agency said in the complaint.
The lawsuit also says that, starting in 2010, the company prevented competitors such as Circle, a social network, and Vine, a short video platform, by adding new limits on how developers external developers whose products connect to Facebook may work with other social networks.
“Facebook beats competitors not by improving its own products but instead by imposing anticompetitive restrictions on developers,” according to the lawsuit.
Facebook has criticized the arguments as historical revisionist, noting that the FTC considered merging with Instagram and WhatsApp and did not block the transactions.
“The FTC statement is an attempt to rewrite antitrust law and is subject to a settled expectation of merger review, declaring to the business community that no acquisition is final. ,” Facebook said on Thursday.
The company has until October 4 to respond to a new complaint or file a petition asking Mr. Boasberg to dismiss the case. Last month, it filed a motion asking Ms Khan to reinstate herself from the agency case, saying her work in the House investigation into platform monopolies showed bias against the company. . The FTC on Thursday said it rejected that petition, saying Facebook would receive “appropriate constitutional procedural safeguards” because the case would be heard before a federal judge.
Bill Kovacic, the former chairman of the FTC, said the agency had done enough to “live to fight another day.”
“The judge said ‘show your work,’ and it looks like they’ve done enough to accommodate that request,” he said.
But he warned the case would face a long and steep challenge. The FTC has won fewer than 20 of its exclusive lawsuits in the court of appeals since the agency began operating more than 100 years ago, he said.
Mr Kovacic added: “Facebook will fight this fiercely.