US federal judge allows FTC to sue Meta for illegal social networking monopoly News
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US federal judge allows FTC to sue Meta for illegal social networking monopoly

US Judge James Boasberg of the US District Court for the District of Columbia Tuesday denied a motion of dismissal by tech conglomerate Meta Platforms (previously Facebook) against the Federal Trade Commission’s lawsuit suing the company for illegally maintaining its personal social network (PSN) monopoly through anticompetitive conduct.

The FTC had filed an amended complaint after Judge Boasberg dismissed its complaint in June 2021 for failure to plausibly allege Meta’s monopoly power in the PSN market. The order was issued without prejudice and allowed the agency to reinstate the suit by amending its complaint.

The FTC has retained its core argument of Meta’s unlawful monopoly in the market for PSN services. It alleges that this monopoly has been maintained by the acquisition of potential competitors (such as Instagram and WhatsApp) and by implementing policies preventing interoperability between its app Facebook and other apps that it viewed as “nascent threats.”

This time the FTC provided more robust and detailed facts for its allegations, clearing the bar for pleading. Judge Boasberg has thus allowed the allegations of illegal monopoly, barriers to market entry, and anticompetitive conduct through acquisitions of potential competitors. However, he did not allow allegations around interoperability since the company had abandoned the policy in 2018 and its last alleged enforcement was even further in the past.

The suit will now proceed for discovery. Meta responded to the decision in a statement to The Verge:

Today’s decision narrows the scope of the FTC’s case by rejecting claims about our platform policies. It also acknowledges that the agency faces a ‘tall task’ proving its case regarding two acquisitions it cleared years ago . . . We’re confident the evidence will reveal the fundamental weakness of the claims. Our investments in Instagram and WhatsApp transformed them into what they are today. They have been good for competition, and good for the people and businesses that choose to use our products.

 

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