Facebook Prevails In Antitrust Challenges

Federal court dismisses two lawsuits alleging anti-competitive behavior

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June 28, 2021

A federal court Monday dismissed two lawsuits alleging Facebook violated antitrust law by purchasing two of its competitors.

The U.S. District Court for the District of Columbia heard the two lawsuits, brought by the Federal Trade Commission and a group of state attorneys general, respectively. Both suits alleged that Facebook’s acquisition of WhatsApp and Instagram constituted anti-competitive behavior. But Judge James Boasberg ruled against both plaintiffs. Boasberg, an Obama appointee, said the FTC did not prove Facebook holds a monopoly over its market and that the attorneys general had brought their case too late after the acquisitions.

Both suits were dismissed "without prejudice," which means the FTC and the attorneys general can file amended complaints. But the rulings illustrate the roadblocks toward curbing the power of major tech platforms despite increased congressional interest in doing so.

Antitrust suits must prove the companies in question have a high level of "market power" and are therefore monopolies. Boasberg said the FTC had not proven Facebook’s 60 percent share of the market for "Personal Social Networking services" constituted a monopoly. Boasberg noted that "this case involves no ordinary or intuitive market," since the product is free and users can use more than one social media platform at a time.

According to Rep. Ken Buck (R., Co.), a prominent Republican supporter of increased oversight of big tech companies, "Today’s development in the FTC’s case against Facebook shows that antitrust reform is urgently needed." Buck called for "additional tools and resources to our antitrust enforcers" to target companies like Facebook.

Buck is the cosponsor of several bipartisan antitrust bills that will go to the House floor later this summer. One bill would bar Apple, Facebook, Google, and Amazon from any new mergers or acquisitions. Others would increase funding for the FTC and expand regulatory definitions of anti-competitive behavior.

Although the bills have received support from some Republicans, House Minority Leader Kevin McCarthy (R., Calif.) and allies have called the bills insufficient. Rep. Darrell Issa (R., Calif.) said the bills did not address big tech censorship of conservatives online and called for bills that would allow users to sue when their political posts are censored.

Facebook bought the photo sharing app Instagram in 2012. It acquired WhatsApp, an internationally popular messaging app, in 2014. The state attorneys general allege that Facebook’s aggressive strategy of buying competitors constituted anti-competitive behavior. Those mergers escaped scrutiny at the time.

In a tweet, Sen. Josh Hawley (R., Mo.) called the rulings "deeply disappointing" and said the court acknowledged Facebook’s "massive market power but essentially shrugged its shoulders."