Federal Court Says FTC Can Sue Facebook for Antitrust Violations

Suit could force Facebook to spin off WhatsApp and Instagram

Santi Ruiz • January 11, 2022 6:00 pm

A federal court on Tuesday said the Federal Trade Commission can proceed with an antitrust suit against Facebook.

The U.S. District Court for the District of Columbia rejected Facebook’s motion to dismiss the FTC’s lawsuit, which alleges that Facebook’s purchases of WhatsApp and Instagram were anticompetitive. If the suit is successful, Facebook could be forced to spin off the subsidiaries, two of its most valuable assets after the Facebook platform itself.

The court’s decision reverses its June ruling, which held that the FTC’s lawsuits were too vague. At the time, District Judge James Boasberg said the FTC had not proven that Facebook’s 60-percent share of the market for “Personal Social Networking services” constituted a monopoly. He directed the FTC to refile the suits with a narrower, more specific argument.

The FTC’s amended filing alleges Facebook has bought competitors WhatsApp and Instagram with the aim of destroying competitors. It also notes that Facebook retains users following major scandals, a sign of market power. Boasberg found the revised suit “far more robust and detailed than before, particularly in regard to the contours of Defendant’s alleged monopoly.”

The case is widely seen as a test of President Joe Biden’s FTC appointees, who have set their sights on curbing Big Tech. FTC chairwoman Lina Khan has prioritized curbing tech power at the agency. Another Biden FTC nominee, Alvaro Bedoya, has criticized big tech for violating user privacy. Critics say, however, that Khan is stretching the law to go after tech companies.

Republicans in Congress have attacked tech companies for restricting speech on their platforms but are divided on providing the FTC with more power. Republican senators Josh Hawley (Mo.), Chuck Grassley (Iowa), and Tom Cotton (Ark.) have all cosponsored bills that would give the FTC more authority over tech companies. Other lawmakers, including Sen. Mike Lee (R., Utah), have slammed the Biden FTC for political “abuses.”