US court gives greenlight to anti-trust case against Facebook

Jan 12, 2022: According to a report by Bloomberg, Meta Platforms Inc.’s Facebook must face the US. government’s monopoly lawsuit alleging that the company abused its dominance and should be broken up, a US judge ruled.

U.S. District Judge James Boasberg in Washington denied Facebook’s motion to dismiss the Federal Trade Commission’s revised antitrust complaint, which the agency refiled after the judge in June dismissed the case. Boasberg said in his ruling that the FTC’s allegations are “more robust and detailed.”

The US Federal Trade Commission has accused the social media giant, which has changed its name to Meta, of creating an illegal monopoly by acquiring potential competitors, which it now owns such as Instagram and WhatsApp. Judge James Boasberg’s decision is a blow to Facebook, which underwent a fresh scrutiny last year when executives learned after a whistleblower leaked documents showing executives knew the harm their services could cause to teens, democracy and users’ well-being.

“It may take a long time and a tall order to prove its case,” but the case by the FTC will not be ruled out, Boasberg decided, after tossing the original suit last year.

The judge wrote, “The Commission continues to allege that Facebook has long had a monopoly in the market… and that it has unlawfully maintained that monopoly,”

“The facts alleged this time around to fortify those theories, however, are far more robust and detailed than before,” he added.

The decision is a major victory for the FTC and chair Lena Khan, who handled the case when she was nominated by President Joe Biden to head the agency. The FTC filed a new complaint in August with new details to reinforce the agency’s claim that Facebook has the dominant market share in the US personal social networking market and has the power to exclude competition. The lawsuit seeks a court order to terminate Facebook’s acquisition of Instagram and WhatsApp.

Boasberg also rejected Facebook’s argument that the case should be dismissed because the commission’s decision to amend and refile was fueled by a bias against the company by FTC chairwoman Lena Khan, saying the contention is irrelevant because Khan is a prosecutor and not a judge who must be neutral.

The FTC said Facebook’s dominance “is protected by high barriers to entry,” and that “even an entrant with a superior product cannot succeed against the overwhelming network effects enjoyed by an incumbent personal social network.”

The lawsuit, which could take years to pass without a settlement, calls on the court to order “asset divestiture”, including on WhatsApp and Instagram, to restore competition. Boasberg said in his dismissal decision last year that there was a lack of evidence in the agency’s initial lawsuit, specifically to explain the market that Facebook was allegedly monopolizing.

The case is U.S. Federal Trade Commission v. Facebook Inc., 20-3590, U.S. District Court for the District of Columbia.

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