Federal judge clears the way for FTC's lawsuit against Facebook - The UpStream

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Federal judge clears the way for FTC's lawsuit against Facebook

posted Sunday Jan 16, 2022 by Scott Ertz

Federal judge clears the way for FTC's lawsuit against Facebook

It's been just over a year since the Federal Trade Commission (FTC) filed its antitrust suit against the company formerly known as Facebook. The suit was not the only one filed at the time, accompanied by a similar antitrust suit filed by a coalition representing all but 3 US states. This week, US District Judge James Boasberg has dismissed the company's motion to dismiss, meaning that the case will go forward.

Details of the case

The FTC has argued that Meta, formerly Facebook, has used what they call a "buy and bury" scheme to remain relevant. Specifically, they point to the company's purchases of Instagram and WhatsApp as evidence. They allege that the company purchased both of these services as they were planning to release new features that would have challenged Facebook's social media dominance.

Judge Boasberg, finding the case can proceed, said, that The FTC's "allegations that Facebook scaled down and eventually shuttered its own mobile-sharing app after acquiring Instagram is consistent with the assertion that consumers would have a better and broader market of services to choose from had the acquisition never occurred." He also pointed to a quote from Mark Zuckerberg from 2012, where he seemingly admitted both acquisitions were about eliminating competition. Zuckerberg said that he was "the most worried about messaging. WhatsApp is already ahead of us in messaging in the same way that Instagram was 'ahead' of us in photos... I'd pay $1B for them if we could get them." He was off by a lot.

The history of the case

In the 13 months since the initial filing, the FTC has struggled with the case. Initially, Judge Boasberg granted Facebook's motion to dismiss but encouraged the FTC to sharper their focus. He believed that there was likely merit behind their allegations, but that they had not justified their case well enough. When approving this altered version of the filing, the judge said,

The core theory of the lawsuit remains essentially unchanged. The facts alleged this time around to fortify those theories, however, are far more robust and detailed than before, particularly in regard to the contours of Defendant's alleged monopoly.

The end of the motion to dismiss was not Meta's last trick, however. The company also seeks to have FTC Chair Lina Khan recused from the case. The company claims that she already had a preconceived notion about the state of the company and the case before she joined the agency. Judge Boasberg did not track with Meta on this one, saying that her past did not change the details of the case.

Future judgement

While Judge Boasberg has allowed the case to move forward, he has also made statements that reveal he's going to take the case under open advisement. He wrote in his decision,

The advent of federal legislation addressing various privacy and advertising concerns related to consumer technology is consistent with the intuitive notion that consumers care about these issues and may prefer stronger protections in their {social networking} services.

This suggests that, even though legislation is underway to scrutinize social media and other Big Tech companies, he will not let that affect the decision of the court.


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