The US Commerce Department’s competition lawsuit against Facebook was accepted in a second attempt by a federal district court in Washington, DC. Judge James Boasberg dismissed the first version last summer, citing inadequate reasoning. In the amended lawsuit, he sees the allegation of unfair competition much better justified, as can be seen from Tuesday’s court documents.
The original lawsuit dates back to December 2020. At that time, the US trade authority FTC sued Facebook (now Meta) for purchasing Instagram and WhatsApps. The authority accuses the group of illegally obstructing competition for years. The FTC has received support from the Attorney General of almost all US states, as well as the DC and Guam Territories, who have jointly filed a similar lawsuit. Facebook presented the US competition lawsuits as inadmissible and moved to dismiss them.
Meta’s success was short-lived
Initially with success: both US competition lawsuits against Facebook were dismissed. The states let Facebook do it for too long and thus wasted the chance to put a stop to the group. The restriction does not apply to the FTC, which is why the court has allowed it to re-introduce an improved version of its complaint.
This is what the FTC has done: It has re-filed its competition lawsuit against Facebook and is calling for the data group to be split up. The improved lawsuit has passed the first review, so the judge in charge does not approach Facebook’s demand for the lawsuit to be dismissed. Among other things, Facebook had claimed that FTC boss Lina Khan was biased.
New lawsuit under Biden with more arguments
The FTC (Federal Trade Commission) accuses Facebook, among other things, of a monopoly position in the market for online networks. Facebook also bought the WhatsApp chat service and the Instagram photo platform to protect this monopoly in an unfair way. Therefore, the takeovers would have to be reversed.
As requested by the judge, the FTC provided more arguments in the amended lawsuit that are supposed to prove Facebook’s monopoly position. The authority relies primarily on the development of user numbers and analyzes of the time that people spend on the platform.
Meta is confident
A spokesman for the Facebook group Meta said Wall Street Journal after the judge ruled that it was convinced that the facts would refute the allegations. Facebook’s investments in WhatsApp and Instagram have been good for competition and good for the people and companies who use Meta’s products.
Facebook bought Instagram in 2012 for around a billion dollars and WhatsApp in 2014 for around 22 billion dollars in the end. Instagram now has around a billion users, WhatsApp around two billion. The US competition authorities approved the takeovers of Instagram and WhatsApp at the time. In addition to the FTC, an alliance of more than 40 states had filed a lawsuit against the deals, but Judge Boasberg dismissed it completely in June.
In the grounds of his decision, the judge reserved the right to make a prognosis about the course of the now admitted proceedings against Facebook. The FTC must substantiate their allegations in court. The process could take years.
The lawsuit is called Federal Trade Commission v. Facebook and is pending in the US Federal District Court for the District of Columbia under Ref. 1: 20-cv-03590.
(with material from the dpa)
(fds)