Facebook Calls on Judge to Dismiss FTC Antitrust Lawsuit

The tech giant stands accused of building a social media monopoly via its Instagram and WhatsApp acquisitions

Alexander Koerner / Getty Images

Facebook on Wednesday requested a federal judge dismiss antitrust lawsuits brought against the company by the Federal Trade Commission and 48 state attorneys general, claiming they’ve failed to prove the company has harmed consumers or that it’s built a social media monopoly.

The tech giant, in filings made in U.S. District Court in Washington, argued the government and the states suing it “cannot assert that their citizens paid higher prices, that output was reduced, or that any objective measure of quality declined as a result of Facebook’s challenged actions.”

Wednesday’s filing marks the first real counterstrike from Facebook since it was sued by the FTC in December. The FTC claimed Facebook not only has a social network monopoly, but that it has maintained that position primarily through its acquisitions of Instagram and WhatsApp. Facebook bought Instagram for $1 billion in 2012, and two years later, paid $19 billion for WhatsApp. (Both deals were approved by the FTC.)

Through those acquisitions, the FTC now claims Facebook hampered competitors by preventing them from using its APIs, allowing Facebook to build an “unmatched position” in the social media space. The FTC and states suing Facebook have also claimed its social media dominance has harmed consumers.Legal experts have since told TheWrap the FTC has a “tricky” case against Facebook, especially when considering it approved Facebook’s deals at the time they were made.

Facebook will need to meet a “high legal standard” to have a judge throw the cases out before trial, according to The Wall Street Journal, because “the company must show that the plaintiffs’ factual allegations about the nature of the marketplace, even if accepted as true, don’t establish a valid legal claim.”

If Facebook’s dismissal request is denied, here’s where the case will likely hinge: The FTC, according to Penn State antitrust expert John Lopatka, will argue “the illegality is in monopoly maintenance, rather than monopoly acquisition.” In other words, it’s not about whether the Instagram and WhatsApp deals should’ve been allowed, but whether they later helped Facebook keep a stranglehold on the social media market. That’s because while having a monopoly isn’t illegal, weeding out competition, even through expensive buyout deals to maintain that monopoly, is illegal. It might seem like a small distinction, but it’s a critical one in this case.

Pamela Chelin contributed to this story. 


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