Facebook’s antitrust battle with the FTC is not over yet

Lina Khan, nominee for Federal Trade Commission (FTC) Commissioner, speaks during a confirmation hearing of the Senate Committee on Commerce, Science, and Transportation on Capitol Hill in Washington, DC, April 21, 2021.

Saul Loeb | Swimming pool | Reuters

While a federal court granted Facebook a clemency Monday for dismissing an antitrust case brought by a group of state attorneys general and a separate complaint from the Federal Trade Commission, its court battles may not be over yet.

US District Judge James Boasberg dismissed the states’ case entirely, explaining in a court filing that they waited too long to challenge the company’s acquisitions of Instagram and WhatsApp, which were completed more than half a decade prior to their complaint. But by dismissing the FTC’s complaint, he left the door open for the agency to resubmit its claims against Facebook, while laying out a plan for how it could best defend its case.

Facebook said in a statement Monday that it was “pleased” with the court’s ruling, adding: “We compete fairly every day to earn people’s time and attention and we will continue to deliver great products for individuals and businesses. who use our services ”.

The judge’s decision sent Facebook shares soaring more than 4% on Monday, bringing Facebook’s market capitalization past the $ 1 trillion mark for the first time.

A spokesman for the FTC said the agency “is closely reviewing the opinion and evaluating the best option to follow.”

Here are the three options the FTC still has if it wants to continue its case against Facebook:

File an amended complaint

Boasberg gave the FTC a chance to do so again, saying it could file an amended complaint before July 29. If the agency closely follows the court’s guidelines on which parts of the complaint need more detail or could contain more water, that could lead to another opportunity for the FTC to pursue its claims against Facebook.

To do this, the FTC may decide to limit its claim to directly target Facebook’s 2012 and 2014 acquisitions of Instagram and WhatsApp, respectively. Boasberg noted that the FTC has the ability to challenge long-completed mergers, even after failing to block them after a lengthy review at the time Facebook pursued them.

While he declined to speculate on how the timing of the challenge would affect his success, Boasberg disagreed with Facebook’s assertion that the FTC could not seek an injunction on these earlier mergers under antitrust law.

Boasberg was less convinced by the FTC’s claims that Facebook was maintaining its monopoly on the personal social media market by preventing potential rivals or rivals from accessing certain tools on its platform. The agency could choose to remove this aspect of the complaint or present more evidence to support it.

The FTC may also need to clarify its market definition of a personal social networking service if it chooses to review your claims in federal court. Boasberg disagreed with how the FTC defined that market, saying it was unclear how it came to the conclusion that Facebook owns more than 60% of that market, adding that the number and its reasoning were vague.

File a complaint with your administrative law judge

The FTC may also choose to refer your claims to the agency’s own administrative law judge rather than attempting to continue the case in federal court. The agency reportedly considered this option before filing its initial complaint in federal court, according to Politico, and the agency’s president at the time initially favored that route.

That option would give the FTC a bit more control over the case, although the impending departure of one of the commissioners could complicate its outcome. According to the FTC website, the ALJ would issue an initial decision based on procedure, which can be appealed to the full commission. Once the five-person commission reaches its final decision, it can be appealed in federal court.

For now, pro-law enforcement Democrats hold the majority on the commission, with progressive Lina Khan serving as the agency’s director. But Democratic Commissioner Rohit Chopra is expected to leave the agency assuming his nomination to head the Consumer Financial Protection Bureau is confirmed by the Senate.

That would likely leave the agency in a 2-2 stalemate until President Joe Biden nominates and the Senate confirms a new commissioner. Both current Republican commissioners voted against filing the initial lawsuit against Facebook.

Still, commissioners are expected to decide Thursday during an open meeting whether to revoke a 2015 policy statement. The statement essentially narrowed the scope of the cases the agency was most likely to bring under Section 5 of the Act. from the FTC to those already illegal under existing antitrust law.

Section 5 generally allows the FTC to pursue cases that involve or affect “unfair methods of competition in commerce.” Reversing the above statement could make it easier for the FTC to file broader claims against Facebook through its internal process.

Drop the case

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