Risk & Compliance

FTC Revives Antitrust Suit Against Facebook

In an amended complaint, the commission seeks to bolster its allegations that Facebook has abused a monopoly position in social networking.
Matthew HellerAugust 19, 2021

The U.S. Federal Trade Commission has taken another swing at convincing a federal judge that it has a legal basis to sue Facebook for abusing a monopoly position in social networking.

The FTC said an amended antitrust complaint it filed on Thursday addressed the concerns of U.S. District Judge James E. Boasberg, who granted Facebook’s motion to dismiss the original complaint in June.

“The amended complaint bolsters the FTC’s monopoly power allegations by providing detailed statistics showing that Facebook had dominant market shares in the U.S. personal social networking market,” the commission said in a news release.

“The suit also provides new direct evidence that Facebook has the power to control prices or exclude competition; significantly reduce the quality of its offering to users without losing a significant number of users or a meaningful amount of user engagement; and exclude competition by driving actual or potential competitors out of business,” it added.

The FTC initially accused Facebook in December of unlawfully seeking to suppress competition in the “personal social networking” (PSN) market by buying up potential rivals such as the messaging platform WhatsApp and image-sharing app Instagram.

But in his June 28 decision, Judge Boasberg ruled that the FTC had failed to plead enough facts to establish that Facebook has monopoly power in the PSN market. “The complaint contains nothing on that score save the naked allegation that the company has had and still has a ‘dominant share of th[at] market (in excess of 60%),’” he said.

The commission voted 3-2 to refile the complaint. According to The New York Times, the amended pleading provides “greater detail and a more sweeping narrative of the company and what the agency says is a pattern of anticompetitive behavior since Mark Zuckerberg co-founded it at Harvard in 2004.”

Among other things, the FTC now alleges that several metrics, including time spent on Facebook, daily active users, and monthly active users, “provide significant evidence of Facebook’s durable monopoly power in personal social networking services since at least 2011.”

The complaint also notes that “even when Facebook’s conduct has caused significant user dissatisfaction, Facebook does not lose significant users or engagement to competitors. This is an indicator of market power.”

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