WASHINGTON, 20 Aug 2021:
The US Federal Trade Commission yesterday refiled a stronger version of its lawsuit against Facebook – charging it with creating an illegal monopoly, after a court rejected the first suit in June.
In its renewed filing, the FTC included more evidence and analysis to demonstrate that Facebook allegedly has maintained a monopoly on the “personal social networks” to suppress potential competitors.
The five-member FTC governing panel approved the modifications to its lawsuit by a vote of 3-2.
The independent entity, tasked with protecting consumer rights and ensuring companies comply with anti-trust laws, is headed by a five-person panel, the members of which serve for seven years.
The commissioners are selected by the US president and are confirmed by the Senate, and no more than three may belong to the same political party.
In June, federal judge James Boasberg threw out the FTC’s initial lawsuit – ruling it did not offer sufficient evidence to prove Facebook was controlling the market to the detriment of competitors.
In its modified suit, the FTC uses data that Facebook itself collected on its active users.
The regulatory authority contends Facebook “resorted to an illegal buy-or-bury scheme to maintain its dominance,” according to an FTC news release yesterday.
The FTC accuses Facebook of buying emerging rival social network messaging firms Instagram and WhatsApp to protect its own market dominance and also of providing other potential competitors with access to its platform and data and then cutting them off when they became threats.
Facebook has until Oct 4 to respond to the modified suit – but the firm already lambasted the FTC’s lawsuit yesterday as “meritless,” adding that that its purchases of Instagram and WhatsApp had been “reviewed and cleared” by regulators “many years ago”.
“The FTC’s claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final,” Facebook said on Twitter.
“We fight to win people’s time and attention every day, and we will continue vigorously defending our company.”
The new FTC chairperson appointed by president Joe Biden, Lina Khan, has been one of the foremost figures calling for additional curbs on the market dominance of big companies, in particular Silicon Valley behemoths which have amassed significant power in recent years.
Facebook and Amazon both have petitioned the FTC for Khan to recuse herself from cases involving the companies, citing previous criticism she levelled at them – but so far both those petitions have been unsuccessful.
The FTC yesterday said it had “carefully reviewed” Facebook’s recusal petition and dismissed it. “As the case will be prosecuted before a federal judge, the appropriate constitutional due process protections will be provided to the company,” the regulatory agency said.