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In April, Meta filed a motion to dismiss the lawsuit. Now, the company will have to face the FTC in court.
Meta will have to face an antitrust lawsuit filed by the US Federal Trade Commission (FTC), according to a ruling by DC district judge James Boasberg yesterday (13 November). The lawsuit accuses the company of holding a monopoly in the social media networking space through the acquisition of Instagram and WhatsApp.
As part of the complaint, the FTC alleges that Meta’s dominant market share is protected by “barriers to entry” into the market, which the filing describes as “any factor that permits firms already in the market to earn returns above the competitive level while deterring outsiders from entering”.
The FTC also alleges that as well as holding a monopoly, Meta has “wilfully” maintained that power through anticompetitive practices – specifically by buying up Instagram in 2012 and WhatsApp in 2014.
In April of this year, Meta filed a motion asking the District Court to dismiss the FTC’s lawsuit, stating that Meta competes “fairly” and faces “strong competition”. Now that the lawsuit has been allowed to proceed, Meta will have to battle it out in court.
The FTC originally filed a lawsuit against Meta – then Facebook – in 2020, alleging that the company engaged in a systematic strategy to eliminate threats to its monopoly by purchasing the two platforms.
At the time, the FTC stated: “This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition.”
The lawsuit called for a permanent injunction that could have forced Meta to sell a number of its assets, including WhatsApp and Instagram.
Boasberg dismissed the lawsuit in 2021 stating that the FTC’s case did not show sufficient evidence that Meta had a monopoly. However, when the FTC filed an amended complaint in early 2022, Boasberg allowed it to proceed, stating at the time that the FTC had “alleged enough facts to plausibly establish” that Meta exercises monopoly in the personal social networking market.
Meta spokesperson Christopher Sgro told The Verge that the trial will show that Meta’s acquisitions of Instagram and WhatsApp were “good” for consumers.
“More than 10 years after the FTC reviewed and cleared these deals, and despite the overwhelming evidence that our services compete with YouTube, TikTok, X, Apple’s iMessage, and many others, the Commission is wrongly continuing to assert that no deal is ever truly final, and businesses can be punished for innovating.”
Meta and the FTC will convene at a conference via Zoom on 25 November to discuss trial scheduling.
Last month, an FTC antitrust lawsuit against Amazon that alleged the e-commerce giant uses “anticompetitive and unfair strategies” was given the green light, while earlier this year, Google lost a major antitrust lawsuit in the US, with the court ruling that Google is a monopolist.
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