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FTC's Second Antitrust Attempt Against Facebook Gets Past The First Hurdle

from the slightly-better dept

As you'll recall, at the end of 2020, the FTC filed an antitrust case against Facebook. Last summer, the district court dismissed the case, noting that the complaint was "legally insufficient," and didn't really back up its central claims. Based on that, the FTC went back to the drawing board and filed an amended complaint last August. As we noted, the amended complaint was better than the first one -- which was heavy on narrative, but little on support to back it up. The amended complaint had more in it, though we still felt that the market definition was odd, and some of the complaint seemed to undermine other parts of it.

Either way, Facebook again asked the court to dismiss it, but this time, they're letting the case move forward. Basically, the court says that on a second pass, the FTC has actually provided at least some support of the central arguments in the complaint:

Eagerly accepting such invitation, the FTC has filed an Amended Complaint containing significant additions and revisions aimed at addressing the shortcomings identified in the Court’s prior Opinion. The core theory of the lawsuit remains essentially unchanged. The Commission continues to allege that Facebook has long had a monopoly in the market for PSN services and that it has unlawfully maintained that monopoly via two types of actions: first, by acquiring competitors and potential competitors — most notably, Instagram and WhatsApp — that it believed were well situated to eat into its monopoly; and second, by implementing and enforcing policies that prevented interoperability between Facebook and other apps that it viewed as nascent threats. 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 court more or less says that Facebook may still prevail in the end -- noting that the FTC will "face a tall task down the road in proving its allegations," but, at this stage of the game, the allegations are enough to allow the case to move on to the next stage.

The court does reject one part of the FTC's case -- that Facebook's interoperability policies were anti-competitive:

The Court will not, however, allow the allegations surrounding Facebook’s interoperability policies (also known as the Platform policies) to move forward; they founder for the same fundamental reasons as explained before: Facebook abandoned the policies in 2018, and its last alleged enforcement was even further in the past.

Given the beefed up filing, this isn't a huge surprise. I still think that the FTC's case here remains surprisingly weak. I honestly expected something a lot more damning than the weird market definition and the allegations -- many of which are presented in ways that could easily be removing important context (such as reasons for actions that were not anti-competitive, but for the benefit of users).

Either way, the case is about to get a lot more expensive for Facebook, and even if the odds are that it would still prevail in the end, it might try to settle the case to avoid having to go through the process. That said, with Lina Khan leading the FTC, I'm guessing the FTC is willing to press this case forward as far as possible, even if it means an eventual loss in court...

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Filed Under: antitrust, competition, discovery, ftc, market definition, motion to dismiss
Companies: facebook, meta


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  • icon
    That Anonymous Coward (profile), 12 Jan 2022 @ 10:54am

    Now do ISPs & Cell providers...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Jan 2022 @ 11:37am

    Well...

    When you have a near-monopoly on the market and collude with your biggest "competitors" to control the market (in this case, social media and who can speak), you're going to eventually end up in court and you may just lose.

    After all, Microsoft lost its anti-trust lawsuit over a free webbrowser back in the 90s.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Jan 2022 @ 11:44am

    it seems to me that antitrust actions, such as they are, look they way they do because the goals are to jab at some company for reasons that may have nothing to do with antitrust or what is litigated in the case at all, while studiously avoiding other and possibly better paths so as to not set precedents that would actually affect the way we like to do business as a whole.

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 12 Jan 2022 @ 1:16pm

    PSN service?

    Play station service,
    Payment service network?
    Professional services network?

    Lawinsider.com
    PSN Services means any function, feature, capability, utility or service provided by SCEA or its Affiliates via the PlayStation Network, including, but not limited to, user identification names, associated user lists and functions to maintain or control such lists, communication utilities such as chat and messaging and commerce-related services.

    So its the first one?
    PSN has facebook, and no one ELSE has it?
    No one else tried to connect to PSN? Pay SONY MONEY and get it done.

    WTF???

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 12 Jan 2022 @ 1:19pm

    Looking forward to the next anti-Khan hit-piece Techdirt decides to publish as this case moves forward, similar to the one by Brian Albrecht y’all put out last year.

    reply to this | link to this | view in chronology ]


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