Facebook loses court bid to halt FTC antitrust complaint

Facebook loses court bid to halt FTC antitrust complaint

By Brian Fung, CNN Business

US antitrust officials can continue their case to break up Meta, Facebook’s parent company, a federal judge ruled on Tuesday, dealing a blow to the social media giant, which had argued the complaint should be dismissed.

The decision allows federal prosecutors to try to prove their allegations that Meta has illegally abused a monopoly in the marketplace for social media — and that its subsidiaries Instagram and WhatsApp should be spun off.

District Judge James Boasberg previously threw out the Federal Trade Commission’s complaint last June. At the time, Boasberg said agency prosecutors had not done enough to show that Facebook held a monopoly in social networking. But he left the door open for the FTC to resubmit its complaint with changes.

In August, the FTC refiled its complaint with the backing of its new chair, the vocal tech industry critic Lina Khan. Facebook again called for Boasberg to quash the suit, but in Tuesday’s opinion, the judge said the FTC’s “significant additions and revisions” from its earlier filing met the threshold for the case to continue.

The FTC didn’t immediately respond to a request for comment. In a statement, Meta said it was confident “the evidence will reveal the fundamental weakness of the [FTC’s] claims.” The company also pointed out that Boasberg described the FTC’s job ahead as a “tall task.”

The case gives Khan a chance to make her mark in her first turn as a federal regulator. Khan played a key role in kickstarting the current wave of antitrust scrutiny of Big Tech platforms with a 2017 paper in the Yale Law Journal highlighting the dominance of Amazon. Khan also helped lead a 16-month congressional investigation of Big Tech while working for the House antitrust subcommittee, a probe that produced a landmark report in 2020 finding that Amazon, Apple, Google and Meta enjoy monopoly power.

Meta had called for Boasberg to throw out the FTC suit on the grounds that Khan should not have been able to vote to approve the new complaint, given her past criticism of Big Tech companies. Last July, company officials wrote to the FTC seeking Khan’s recusal from all matters related to the social media giant, but that did not deter Khan from voting in August to continue the litigation. On Tuesday, Boasberg sided with the FTC on that issue, saying Khan’s vote saw her “acting in a prosecutorial capacity, as opposed to in a judicial role.”

But, as in his decision to toss out the original FTC complaint, Boasberg on Tuesday again rejected one of the US government’s central claims: that Facebook had anticompetitively controlled how third parties could access the company’s data. The alleged abuses happened too long ago for the FTC to bring a claim now, he said, and the agency does not allege that any similar harms are about to occur.

Still, the lawsuit’s continuance signals further unwelcome scrutiny for Meta that could potentially end with some of the company’s most valuable assets spun off. That would mark a shift with monumental consequences for society in light of the tech giant’s reach into seemingly every corner of our lives.

The-CNN-Wire™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

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Kassie Hoffman
Kassie pens down all the news from the world of politics on ANH.