Jan 11, 2022 - Technology

Meta loses bid to dismiss FTC antitrust case

Illustration of a frowning face made from the Meta logo

Illustration: Annelise Capossela/Axios

The Federal Trade Commission's antitrust suit against Meta, formerly Facebook, can move forward, a federal court ruled Tuesday.

The big picture: The same judge who dismissed an earlier version of the agency's lawsuit, filed under the Trump administration, says this time the government's case — as rewritten by the agency now led by chair Lina Khan — is good enough to try.

  • "Although the agency may well face a tall task down the road in proving its allegations, the Court believes that it has now cleared the pleading bar and may proceed to discovery," U.S. District Judge James Boasberg from the U.S. District Court for the District of Columbia wrote.

Why it matters: "Discovery" means the FTC can spend the next months (or even years) digging through Facebook's data and records.

Details: Both versions of the FTC's case against Meta charge the company with trying to maintain dominance of social networking by taking a "buy or bury" approach to competitors such as WhatsApp and Instagram.

  • The judge wrote that the original version of the suit "stumbled out of the starting blocks" by failing to document abuses or provide persuasive evidence that Facebook wields monopoly power.
  • The new complaint includes more market share statistics and evidence the FTC says shows Facebook can control prices and block competition.
  • Boasberg's ruling says the FTC has now "alleged enough facts to plausibly establish that Facebook exercises monopoly power in the market for [personal social networking] services," the court determined, along with adequately alleging the company's dominant market share is "protected by barriers to entry into that market."

Of note: Boasberg also wrote he was skeptical of Facebook's argument that Khan couldn't be impartial in this case, differentiating her previous writing on antitrust issues from the sorts of "axe to grind" conflicts "based on personal animosity" or financial interests that typically disqualify prosecutors.

The other side: "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," a Meta spokesperson said in a statement.

The bottom line: "Ultimately whether the FTC will be able to prove its case and prevail at summary judgment and trial is anyone's guess," Boasberg wrote.

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