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FTC Files New Antitrust Complaint Against Facebook

The US competition watchdog has filed a new antitrust complaint against Facebook, the first complaint of which was dismissed by a federal judge in June due to insufficient evidence.

U.S. District Judge James Boasberg gave the Federal Trade Commission (FTC) a chance to amend its case against the social media giant, which was originally filed in December 2020. The FTC, chaired by Biden nominee Lina Khan, voted 3-2 on the complaint.

In his first complaint, Boasberg said the FTC had not defined a plausible market in which Facebook had a monopoly and represented too vague a percentage of the market share it controlled. He also said that under its chosen statue, the FTC did not have the authority to file these specific antitrust charges against Facebook. He advised that the FTC could get a ban under that statue if a violation was underway or was to take place.

While the same argument is maintained, the amended complaint is considerably longer and more detailed than its predecessor, expanding from 53 to 80 pages.

It argues that Facebook’s anti-competitive acquisitions of Instagram and WhatsApp were carried out with the aim of strengthening its monopoly power. It cites internal Facebook communications about potential acquisitions, including Twitter and Snapchat, to demonstrate the company’s intent to eliminate competition.

Holly Vedova, acting director of the FTC’s competition bureau, said; “Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat.”

It also states that it has “made an informed decision” to block rivals from accessing its API, sacrificing any advantage the third-party apps would provide for Facebook to maintain its monopoly.

The complaint maintains the previous definition of the monopolized market: “personal social networking services” that use personal social graphs to connect users with each other. This definition excludes platforms intended to broadcast user-generated content to a large audience, such as LinkedIn, Twitter, Reddit, YouTube, and TikTok. It states that Snapchat is the only major existing competitor in this space.

The amended complaint makes the argument that Facebook’s unimpeded success in the wake of the Cambridge Analytica scandal demonstrates the company’s unwavering hold in this market. The FTC wrote, “Facebook’s ability to harm users by reducing product quality, without losing significant user engagement, indicates that Facebook has market power.” The FTC has fined Facebook a record $5 billion for its privacy violations following the scandal.

The FTC states that Facebook’s share of this market is more than 65 percent, citing active users’ time commitment and statistics as evidence of Facebook’s monopoly power: relevant US market. personal social networking services,” the complaint reads. It says the lack of serious competition has allowed Facebook to “hone a surveillance-based advertising model and impose ever-increasing burdens on its users.”

Facebook has been given until October 4 to respond to the complaint. A statement on his official Twitter account said, “There was no valid claim that Facebook was a monopolist — and that hasn’t changed.”

Facebook has made an effort to undermine the neutrality of FTC Chairman Khan. In July, it called on her to withdraw from the complaint, based on her previous allegations that Facebook has violated antitrust laws. The FTC rejected the proposal, stating, “As the case will go to a federal judge, the company will receive appropriate constitutional protections from the process.”