Federal regulators sharpened their antitrust attack against Facebook, alleging in a revised complaint Thursday that the social network giant pursued a laser-focused strategy to “buy or bury” rivals to suppress competition.
It was the second try by the Federal Trade Commission, after a federal judge in June dismissed antitrust lawsuits brought against Facebook by the agency and a broad coalition of state attorneys general, amid multiplying efforts by federal and state regulators to rein in tech titans’ market power.
The new complaint lays out a detailed history of Facebook’s conduct, particularly since the arrival of mobile devices like smartphones in the 2010s, and the rise of innovative rivals to Facebook.
The FTC is asking for “any relief necessary,” including the potential forced divestiture of assets such as Instagram and WhatsApp. or a restructuring of the company.
Separately, the agency dismissed a request from Facebook that FTC Chair Lina Khan — an outspoken critic of Big Tech appointed in June by President Joe Biden — step aside in this case because of her past public statements. Facebook says Khan’s criticism of its market power when she was an academic and the legal director of an anti-monopoly think tank, and her more recent work on a congressional investigation, make it impossible for her to be impartial.
The FTC’s general counsel’s office reviewed the petition and dismissed the request on grounds that the company’s due-process rights will be fully protected in the federal court proceeding.
Without Khan’s vote, the FTC’s case against Facebook could have stalled by splitting the vote between the four other commissioners — two Democrats and two Republicans. The vote to file the amended complaint was 3-2, with the two Republicans voting against it.
U.S. District Judge James Boasberg had ruled in June that the suits were “legally insufficient” and didn’t provide enough evidence to prove that Facebook was a monopoly. The ruling dismissed the FTC’s complaint but not the case, giving the agency a chance to file a revised complaint.
Boasberg had said the FTC fell short of demonstrating that Facebook holds monopoly market power, failing to provide an estimate for the company’s market share over the past ten years. He dismissed the states’ separate complaint outright.
In the new filing, the FTC laid out a detailed analysis to substantiate its monopoly power claim. “Direct evidence, including historical events and market realities” confirms the allegation, the complaint says. The harm to consumers from the lack of competition “is particularly severe,” it says.
Some of the material meant to show dominant market share is redacted in the public version of the filing, including internal Facebook emails.
The agency made its case anew Thursday as Facebook, Google, Amazon and Apple fall under extreme scrutiny and legislative pressure from the FTC, the Justice Department, European regulators, lawmakers in Congress and state legislatures, and most recently, from an executive order from the Biden White House.
The FTC and 48 states and districts sued Facebook in December 2020, accusing the tech giant of abusing its market dominance in social networking to crush smaller competitors and seeking remedies that could include a forced spinoff of the social network’s popular Instagram and WhatsApp messaging services.
The FTC had alleged Facebook engaged in a “systematic strategy” to eliminate its competition, including by purchasing smaller up-and-coming rivals like Instagram in 2012 and WhatsApp in 2014.