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Tuesday, January 25, 2022

Meta monopoly case from FTC given go-ahead


The US Federal Trade Commission (FTC) has been given the go-ahead to take Facebook to court over anti-trust rules.

The competition and consumer regulator are attempting to force Facebook, now known as Meta, to sell off Instagram and WhatsApp.

Last year, a previous version of the same action failed due to a lack of detail.

Since then, the FTC has revised the case, and a federal judge has ruled that the claim is now “far more robust” and can proceed.

Meta said it was sure it would prevail in court.

Seeking ‘divestiture’

The FTC’s claim is based on the idea that Facebook systematically bought up competitors in order to eliminate competition, effectively giving itself a monopoly.

The two most prominent examples were Instagram and WhatsApp, which Facebook acquired in 2012 and 2014, respectively.

The FTC was seeking “divestiture,” or the sale of those companies in order to end the alleged monopoly.

Judge James Boasberg, who will hear the case in June 2021, stated that the FTC had not provided a justification for its delay in investigating the matter, nor had it provided sufficient evidence to support its claims.

“It almost appears that the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist,” he wrote at the time.

In the wake of the case being thrown out, Facebook’s stock price surged and the company achieved a trillion-dollar (£0.7tn) market value for the first time.

On Tuesday, Judge Boasberg approved the revised case, writing, “In stark contrast to its predecessor, this complaint provides reinforcing, specific allegations that all point to the same conclusion: Facebook has maintained a dominant market share during the relevant time period.”

However, he added, “The agency may well face a difficult task in proving its allegations down the road.”

Meta had asked the court to dismiss the case entirely, saying Lina Khan – a vocal critic of Meta, who chairs the FTC – was biased against the company.

Judge Boasberg, however, said Ms Khan was not an impartial judge and more akin to a prosecutor.

“Although Khan has undoubtedly expressed concerns about Facebook’s monopoly power, these concerns do not suggest the type of ‘axe to grind’ based on personal animosity or financial conflict of interest that has disqualified prosecutors in the past,” he wrote.


However, the judge told the FTC that it needed to drop some allegations about Facebook’s platform policies, which he said the company had already changed.


“Today’s decision narrows the scope of the FTC’s case by rejecting claims about our platform policies,” Meta said.


“It also acknowledges that the agency faces a “tall task” in proving its case for two acquisitions approved years ago.”


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