Facebook Faces Anti-Trust Lawsuit by the FTC

After seeing the first anti-trust lawsuit against Facebook thrown out by a federal judge in 2021, the Federal Trade Commission (FTC) has filed a second suit against the juggernaut social media platform. After surviving a motion to dismiss in January 2022, the case is poised to proceed.

At its core, the lawsuit concerns allegations that Facebook has exercised monopoly power in the social media arena. These allegations are largely based on the acquisition of other popular apps like WhatsApp and Instagram.

The Original Lawsuit

In December of 2020, the FTC filed a lawsuit against Facebook. The lawsuit alleges that the social media company maintained an unlawful monopoly following years of illegal anticompetitive conduct.

The FTC was not alone in these efforts, as the investigation was joined by the attorneys general of 46 states, as well as Washington, D.C. and Guam. According to the lawsuit, Facebook systematically acquired budding rivals in an effort stifle competition in the social network space.

The lawsuit sought an injunction that would have dramatically reshaped the structure of this popular yet divisive company. The FTC sought the divestiture of major assets, including former competitors like WhatsApp. They also sought the removal of specific anticompetitive conditions when it came to software developers. Had the lawsuit been successful, Facebook would have had to seek approval from the government before any future acquisitions or mergers could take effect.

Dismissal of the First Lawsuit

In June of 2021, the judge overseeing the original Facebook antitrust lawsuit dismissed the case. According to the court, the FTC failed to provide facts that could have plausibly led a jury to find that Facebook acted as a monopoly. In other words, the court did not allow the case to proceed because it found the FTC failed to make a case that could be viable at trial. However, this decision did not bring the matter to a permanent end, as the FTC was given the ability to refile their case in the future.

The Current Case

Later in 2021, the FTC filed a new lawsuit against Facebook—now known as Meta Platforms. This lawsuit included additional details regarding alleged monopolistic actions.

The lawsuit followed a similar path as the first, as the company filed a motion to dismiss the case. Had the motion been successful, it would likely have been the end of the FTC’s efforts to label Facebook as a monopoly.

Surviving the Motion to Dismiss

Surviving the motion to dismiss this past January is an important milestone for the FTC’s pursuit of this case. By avoiding dismissal, this second attempt at litigation has surpassed the results of the original case. Surviving this motion is a good sign that the FTC has formulated their arguments in a way that could result in a successful outcome. However, that does not mean that the lawsuit is guaranteed to be successful, and in fact, the court did agree to dismiss one of the two claims raised by the Commission.

The Current Outlook for Facebook

Winning the motion to dismiss hearing was an important step for the FTC and it keeps the anti-trust action alive. However, that does not mean the end result is likely to be successful. In the order for the motion to dismiss, the judge acknowledged that the way forward for the FTC could be difficult. The order highlights the fact that getting past this point does not guarantee success in the end.

Although your company may not be as big as Facebook, you might still find yourself in need of legal counsel. The corporate litigation lawyers at Lomnitzer Law can aggressively pursue a just outcome on your behalf.