What you need to know
- The FTC is going after Facebook again.
- The body has filed another lawsuit against the company, on the grounds that its acquisitions strategy is anticompetitive.
- If successful, the FTC could force Facebook to sell WhatsApp and Instagram.
The FTC is having another run at Facebook over claims its acquisitions of apps like WhatsApp and Instagram were anticompetitive.
In an amended complaint filed Thursday, the FTC stated:
Plaintiff, the Federal Trade Commission ("FTC"), by its designated attorneys, petitions this Court pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), for a permanent injunction and other equitable relief against Defendant Facebook, Inc.("Facebook"), to remedy and prevent its anticompetitive conduct and unfair methods of competition in or affecting commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a)
Specifically, the FTC claims that Facebook has "maintained its monopoly position" within social media by following a strategy of anti-competitive acquisitions, noting Mark Zuckerberg's own words stating "it is better to buy than compete" from 2008:
True to that maxim, Facebook has systematically tracked potential rivals and acquired companies that it viewed as serious competitive threats. Facebook Case 1:20-cv-03590-JEB Document 75-1 Filed 08/19/21 Page 1 of 802 supplemented this anticompetitive acquisition strategy with anticompetitive conditional dealing policies, designed to erect or maintain entry barriers and to neutralize perceived competitive threats.
In its prayers for relief, the FTC is asking the court to force Facebook to sell off WhatsApp, Instagram, and even some other assets to restore competition in the industry. The FTC's case had previously been dismissed on the grounds it had not plausibly established that Facebook had monopoly power in the market for personal social networking services. Keeping one eye on the suit will be Apple, who have asked the judge in its Fortnite legal battle to consider the dismissal of the case as one of the reasons why it should rule against Epic Games.
In response Facebook stated "It is unfortunate that despite the court's dismissal of the complaint and conclusion that it lacked the basis for a claim, the FTC has chosen to continue this meritless lawsuit." The company continued:
There was no valid claim that Facebook was a monopolist — and that has not changed. Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful. The FTC's claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final. We fight to win people's time and attention every day, and we will continue vigorously defending our company.
