A federal judge will allow an antitrust lawsuit brought by the federal government against Facebook to move forward, concluding that the Federal Trade Commission met the threshold for putting forward a valid claim of the platform’s anticompetitive conduct.
The ruling (read it here) by U.S. District Judge James Boasberg was a bit of a surprise, as last summer he tossed out the FTC’s lawsuit, calling it “legally insufficient.”Boasberg stated that the FTC had filed an amended suit in August. “has now cleared the pleading bar and may proceed to discovery.”
As federal agencies and lawmakers pledge to restrain their power, the lawsuit is just one of many Facebook and other major tech platforms facing legal action. The Senate Judiciary Committee will vote on bipartisan antitrust legislation later in the month. It is designed to prevent tech giants giving preference to their products and causing disadvantages to rivals.
Boasberg wrote that the FTC’s new complaint contained more robust facts in backing up its claim that Facebook has monopoly power and “has willfully maintained that power through anticompetitive conduct — specifically, the acquisitions of Instagram and WhatsApp.”
The judge pointed out the challenges that the FTC will have in proving their case. Antitrust lawsuits tend to be focused on consumers’ harm. Facebook, Instagram, and WhatsApp are all free to use. However, Boasberg pointed out that the government claims that a “decrease in service quality, lack of innovation, decreased privacy and data protection, excessive advertisements and decreased choice and control with regard to ads, and a general lack of consumer choice in the market for such services.”
“Ultimately, whether the FTC will be able to prove its case and prevail at summary judgment and trial is anyone’s guess,”The judge wrote. “The Court declines to engage in such speculation and simply concludes that at this motion-to-dismiss stage, where the FTC’s allegations are treated as true, the agency has stated a plausible claim for relief under Section 2 of the Sherman Act.”
Boasberg dismissed the lawsuit filed by 48 state attorney generals in June. They claimed that they waited too much to file their case. The FTC lawsuit also was filed around the same time, December, 2020, during the final months of Donald Trump’s administration.
Facebook also sought to dismiss the latest complaint on the grounds that the current chairwoman of the FTC, Lina Khan, who was appointed by President Joe Biden, should have recused herself on the commission’s vote to authorize a new complaint against the tech giant. Khan previously worked as counsel to the House Judiciary’s antitrust subcommittee on its investigative report concluding that Facebook and other tech platforms had monopoly power.
Boasberg argued that Khan was acting as a prosecutor and not as a judge when deciding whether to proceed with the lawsuit.
“There is no indication that Chair Khan’s decision to seek reinstatement of the FTC’s suit against Facebook was based on anything other than her belief in the validity of the allegations,”He wrote. “Such behavior does not necessitate recusal.”
Amazon has also suggested that Khan should withdraw from matters involving their company. The FTC is currently reviewing Amazon’s proposed purchase of FTC, but the agency has declined to comment on the process.
FTC spokespersons and Facebook spokespersons didn’t immediately respond to our requests for comment.