Facebook Files Motion to Dismiss FTC Complaint Arguing Market Definition Is A Fiction

Report from the Washington Post

In Brief – Facebook has again filed a motion to dismiss the antitrust complaint of the Federal Trade Commission (FTC), arguing that the agency’s attempt to address the deficiencies noted by Judge James Boasberg in dismissing the FTC’s original lawsuit again fell short with “no valid factual basis” that the social media and advertising company is an illegal monopolist. Boasberg created a stir in June by unexpectedly granting Facebook motions to dismiss against both the FTC and State AG antitrust complaints, each of which accused the digital giant of being a monopoly that illegally acquired Instagram and WhatsApp and sought to unwind the acquisitions. The judge fully rejected the State AGs authority to challenge the acquisitions so many years later (they are appealing) but granted the FTC the opportunity to amend its complaint. The agency’s amended complaint dug in on defining Facebook as a “personal social networking” company distinct from giant platforms like TikTok, YouTube, LinkedIn, Twitter and Pinterest, claiming it only faces direct competition from much smaller Snap and has held at least 80% of user attention for personal social networking services since 2012. Facebook calls that narrow market “a litigation-driven fiction at odds with the commercial reality of intense competition” from those giant social media and advertising platforms.

Context – “Defining the market” is often key to an antitrust complaint, and this one could turn on that as well. However, as with the Epic Games v Apple case, there are other aspects to proving an illegal monopoly, including concepts like the ability to foreclose competition. In what was a bad week for Facebook, with its “Whistleblower” on Capitol Hill to great acclaim, a technical problem knocked Facebook’s services offline for hours. While progressive maven Rep. Alexandria Ocasio-Cortez (D-NY) used the blackout to justify breaking the company up for being a monopoly that consolidated online communications in one business, other reports indicated a spurt of downloads of alternatives like Signal and Telegram.