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Judge grants FTC a second chance to challenge Facebook on antitrust grounds

FTC given second chance to challenge Facebook on antitrust grounds

January 13, 2022: -On Tuesday, a judge granted the Federal Trade Commission (FTC) a second chance to get its charges of illegal monopolization against Facebook, which rejects the company’s motion to dismiss the lawsuit in a new.

U.S. District Judge James Boasberg granted Facebook’s earlier motion to dismiss more than the summer but allowed the FTC a chance to amend its complaint and try again. He also rejected a similar lawsuit from a coalition of state attorneys general without granting an opportunity for reconsideration, though the states have indicated they intend to appeal that ruling.

“The Federal Trade Commission’s first antitrust suit against Facebook, Inc. stumbled out of the starting blocks, as this Court dismissed the Complaint in the previous June,” Boasberg wrote in Tuesday’s filing. He said that while the Commission’s core theory remains the same in its updated complaint, “The facts alleged this time nearly to fortify those theories, however, are far more robust and detailed than before, particularly regarding the contours of Defendant’s alleged monopoly.”

Shares of Facebook owner Meta moved on the news and were still positive for the day as of Tuesday afternoon.

Boasberg initially dismissed the FTC’s complaint as he said it failed to plausibly allege Facebook’s monopoly power in what is defined as the personal social networking services market. That market definition sought to exclude different social media platforms like YouTube, used primarily to watch videos, or LinkedIn, used for professional networking.

While Boasberg maintained the FTC could face challenges in proving its allegations, he wrote on Tuesday that “it has then cleared the pleading bar and may proceed to discovery.”

Boasberg said the FTC achieved this by giving enough alleged facts to plausibly establish Facebook’s monopoly power in the market, claiming its market share is protected by barriers to entry, and alleging its “willfully maintained” dominance through anticompetitive behavior, mainly through its acquisitions of Instagram and WhatsApp.

The judge discarded Facebook’s contention that the FTC’s vote to file the amended complaint should be considered invalid due to the company believing FTC Chair Lina Khan should have recused herself. Facebook then argues that Khan’s past writings and work had shown she had prejudged its liability, which should be grounds for recusal, but Khan participated in the vote.

“The Court believes that such contention misses its target, as Khan was acting in a prosecutorial capacity, as opposed to in a judicial role, in connection with the vote,” Boasberg wrote.

Still, Boasberg delivered a minor blow to the FTC, which said that it could not proceed with its claims that Facebook’s interoperability policies for developers on its platform helped it maintain its dominance. He said that’s because Facebook abandoned the guidelines in 2018 and allegedly stopped enforcing them even earlier than that.

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