August 10, 2022

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Facebook monopoly case: FTC lawsuit moves forward

Meta Platforms Inc.’s Facebook must face the U.S. government’s monopoly lawsuit alleging that the company abused its dominance and should be broken up, a judge ruled.

U.S. District Judge James Boasberg in Washington Tuesday 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, who started his opinion by writing, “Second time lucky?,” said the FTC’s allegations are “are far more robust and detailed than before.”

“The FTC has now alleged enough facts to plausibly establish that Facebook exercises monopoly power,” the judge wrote. “The agency has also explained that Facebook not only possesses monopoly power, but that it has willfully maintained that power through anticompetitive conduct.”

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The decision is a major win for the FTC and Chair Lina Khan, who took over the case when she was named to lead the agency by President Joe Biden. The FTC filed the new complaint in August with new details to bolster the agency’s claim that Facebook dominates the U.S. personal social-networking market and has the power to exclude competition. 

The FTC is seeking a court order to unwind Facebook’s acquisitions of Instagram and WhatsApp, arguing the two deals—which the FTC initially approved—were part of a pattern by Facebook and Chief Executive Officer Mark Zuckerberg to eliminate companies as competitive threats by buying them. The lawsuit will now proceed to the next stage, known as discovery, where the two sides will gather evidence for trial.

The lawsuit is part of a broad effort by competition enforcers in the U.S. to rein in the power of the biggest U.S. tech companies.