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FTC Files Antitrust Suit Against Facebook

Agency says company must sell WhatsApp, Instagram

Federal Trade Commission chairwoman Lina Khan / Getty Images
• August 19, 2021 4:20 pm

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The Federal Trade Commission on Thursday filed an antitrust complaint against Facebook that alleges the social media giant acquired competitors to stifle competition.

The agency is refiling a claim a federal judge tossed out in June. The judge argued the FTC had not proved Facebook has a monopoly in the personal social networking market, but gave the agency an opportunity to refile the case. The FTC is an independent federal agency tasked with enforcing antitrust laws. If it prevails in this case, Facebook will be required to sell WhatsApp and Instagram.

The case is a major test for newly appointed FTC chairwoman and big tech critic Lina Khan. Khan has advocated for laws that broaden definitions of anticompetitive behavior, even in cases like Facebook’s where the product is free for consumers. The traditional consumer-welfare standard says companies must cause immediate harm to consumers through higher prices in order to be considered monopolies.

The FTC voted 3-2 along party lines to refile the complaint, with both Republican commissioners criticizing the move. The amended complaint provides more evidence that Facebook’s size and market share make it a monopolist. It argues social media companies like TikTok are not Facebook competitors, since they connect users with random content creators instead of friends and family.

"After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat," said Holly Vedova, acting director for the FTC’s Bureau of Competition.

Facebook denied that it was a monopoly, saying its "acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful."

On July 14, Facebook called for Khan to recuse herself from any cases involving the company, citing her past criticism of it. In a press release Thursday, the FTC wrote that the agency’s general counsel reviewed the matter and that Khan would not recuse herself.

Published under: Big Tech, Facebook, FTC