Facebook Antitrust Suit Can Move Forward, Judge Says
The government can proceed with its claims that the company abused its monopoly power through acquisitions.,
A federal judge on Tuesday allowed the Federal Trade Commission’s antitrust lawsuit against Facebook to move forward, rejecting Facebook’s request to dismiss the case and handing the agency a major victory in its quest to curtail the power of the biggest tech companies.
The judge, James Boasberg of the U.S. District Court of the District of Columbia, said last year that the F.T.C. had not provided sufficient evidence that the company, which has since named itself Meta, had a monopoly in social media and abused that power by harming competition. The agency refiled the case in August, and on Tuesday Judge Boasberg said that it had provided better support and that the lawsuit should move forward.
But he also included some caveats. Judge Boasberg said the agency could proceed with its claims that the company abused its monopoly power through acquisitions, which the agency has described as a “buy-or-bury” strategy. He dismissed, however, the agency’s charge that Facebook violated antitrust laws by cutting off third parties from its platform.
The facts provided by the agency, he said, “are far more robust and detailed than before, particularly in regard to the contours of defendant’s alleged monopoly.”
The judge’s decision is a major step forward for regulators battling the powerful armies of lobbyists and litigators employed to protect the empires built by tech giants like Amazon, Apple, Facebook and Google. Their combined market value has surpassed $7 trillion.
Government officials point to this concentration of power for anticompetitive conduct that hurts rivals and can harm consumers. The Justice Department and dozens of states have filed lawsuits against Google, accusing the company of crushing competition in search and in advertising technology.
In rare bipartisan agreement, Democrats and Republicans have rallied around antitrust action and this week, the Senate announced that it would begin to vote on new antitrust laws aimed at the tech sector. And President Biden has filled federal antitrust agencies with vocal critics of technology giants, including the F.T.C. chairwoman, Lina Khan, whom Facebook targeted in its motion to dismiss the lawsuit.
Though success for the agency is far from certain, the lawsuit could take years to play out in court. The process of discovery is typically many months before a case proceeds to trial.
“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,” Judge Boasberg said.
Holly Vedova, the director of the agency’s bureau of competition, said in a statement that the “F.T.C. staff presented a strong amended complaint, and we look forward to trial.”
Facebook said the judge’s decision was a partial victory, because he dismissed one claim, that the company had harmed competition by cutting rivals like the video service Vine from accessing data and features of the Facebook platform. That practice ended in 2018, the judge said.
“Today’s decision narrows the scope of the F.T.C.’s case by rejecting claims about our platform policies,” said Chris Sgro, a spokesman for Meta. “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.”