FTC's new suit says Facebook has a monopoly in “US personal social networking services”, distinguishing it from TikTok, and Lina Khan will not recuse herself
The Verge
Context & Ripple Effects
This is round two of a fight that looked lost in June, when a court threw out both the FTC's original complaint and the state AGs' parallel case for failing to plausibly allege a monopoly — a dismissal Axios read as evidence that current antitrust law struggles to make charges stick. The FTC has now answered with a narrower market definition: 'US personal social networking services', deliberately carving out TikTok so the alleged monopoly isn't diluted by an app Facebook doesn't own.
The procedural drama is just as consequential. In July Facebook formally demanded FTC chair Lina Khan step aside from deliberations over the case, following Amazon's identical move against her — a coordinated test of whether a commissioner known for pre-agency criticism of Big Tech can sit on their cases at all. Her refusal to recuse means Facebook will litigate the merits with the agency's most aggressive skeptic presiding.
First-order effects
Facebook faces a refiled monopoly case built on a market definition that excludes TikTok, forcing it to attack the boundary itself rather than rely on the 'everyone competes with everyone' argument that sank the first complaint.
Khan's refusal to recuse keeps her in the deliberations Facebook tried to remove her from via its recusal demand, raising the odds the case proceeds under a chair whose prior writing is openly hostile to Facebook's business model.
Second-order effects
If the narrow 'personal social networking' definition survives motion to dismiss, it hands enforcers a template for drawing markets tightly around each incumbent's core product — and leaves TikTok structurally outside the frame despite competing for the same attention and ad budgets.
Critics like Mobile Dev Memo are already contesting the suit's economic logic, arguing monopoly control of personal social networking hasn't driven up ad prices — meaning Facebook's best defense may be empirical (ad-market competition) rather than legal (market boundaries), and the ad-pricing claims become the case's soft spot per the critique of the updated complaint.
Third-order effects
The June dismissals were already cited as fuel for lawmakers to toughen antitrust statutes; a refiled case that again stalls would strengthen the congressional track as the more credible path to constraining Facebook, while a surviving case would validate litigation under existing law.
Recusal demands are hardening into a standing defense playbook for big tech defendants facing Khan's FTC — Amazon set it, Facebook followed, and her refusal establishes precedent for how such challenges get resolved, shaping every future case she touches.
The trend: Antitrust enforcement is converging on narrowly-drawn product markets aimed at individual incumbents, while defendants respond with procedural attacks on enforcement personnel rather than the merits.
OK, whew. I've now read all 80 pages of amended FTC suit v Facebook and run a redline from original complaint. In four words, Facebook is royally screwed. Deeper dive coming: Put simply, FTC has delivered on request from Judge to show market power and revised tons of material.
It will be very interesting to see the FTC defend a concept of “social network” that includes Facebook, Instagram and Snapchat, but not Twitter, Reddit, or TikTok https://www.theverge.com/...
Is TikTok a social network? Is Snapchat? Is Facebook even a social network?? What is “social,” anyway? What's a network? WHAT IS ANYTHING Pls give definitive answers to each, all documented & accurate to n significant digits, or else FB has zero market power and there's no issue
3. Now it has. The new complaint uses the most direct evidence of market share I could imagine: monthly users. The complaint says FB has tens of millions more monthly users than its next-biggest rival, Snapchat. Which raises the question: Is Snapchat its next biggest rival?
4. Could be a crucial question. The FTC in the lawsuit explains in some detail how other things we'd probably think of as vaguely “social media” - Twitter and Tiktok - aren't actually Facebook's rivals, because they aren't used for the same purpose. And I think that's true.
6. But the more important question is whether the FTC has show enough clear anticompetitive conduct, in FB's aggressive acquisition of Insta and WhatsApp, to avoid the question of what the market actually is.
2. The FTC's first lawsuit failed because the judge in the case said the FTC needed to show evidence of monopolization in its initial complaint. That's not how the process is supposed to work, but so be it. The FTC was asked essentially to go back and show its work.
Anyway my boring take on this is basically that Facebook offers a huge range of services, many of which face significant competition (e.g. live video, Stories, messaging) and a few for which there's no viable substitute (an interactive virtual directory of most U.S. adults)
5. That claim passes the smell test for me. I don't know anyone who could claim to use Twitter in the same way they use FB or Instagram. Tiktok is slightly different, though. Obviously FB/Insta has used its power to make a carbon copy of Tiktok, in Reels. We'll see.
Biden admin chooses to pursue antitrust cases rather than over-regulating the digital space. There is room for a small reflection here for Europe I think, on the primacy of antitrust for addressing market failures. https://www.wsj.com/...