FTC files a new antitrust complaint against Facebook, after a judge dismissed the first complaint in June; Facebook has until October 4 to respond
This article is an on-site version of our Unhedged newsletter. Tweets: @fbnewsroom : We are reviewing the FTC's amended complaint and will have more to say soon. Lina Khan / @linakhanftc : FTC Alleges Facebook Resorted to Illegal Buy-or-Bury Scheme to Crush Competition After String of Failed Attempts to Innovate https://www.ftc.gov/... Jason Kint / @jason_kint : 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. @ftc : “Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” said Holly Vedova, FTC BC Acting Dir. @ftc : FTC alleges Facebook resorted to illegal buy-or-bury scheme to crush competition after string of failed attempts to innovate: https://www.ftc.gov/... Eric Seufert / @eric_seufert : WhatsApp's founders left Facebook *because* Facebook made plans to integrate ads into WhatsApp. But sure, WhatsApp could have “competed” with Facebook on the basis of ad inventory. Whatever that means. https://twitter.com/... @leah_nylen : On the recusal: “The FTC's Office of General Counsel carefully reviewed Facebook's petition to recuse Chair Lina M. Khan. As the case will be prosecuted before a federal judge, the appropriate constitutional due process protections will be provided to the company.” Cecilia Kang / @ceciliakang : BREAKING: U.S. Takes a New Stab at Facebook Antitrust Suit Seeking Break Up. FTC Claims Facebook Tried To Maintain Monopoly Through Acquisitions and Blocking Competitors Story developing.... https://www.nytimes.com/... Cecilia Kang / @ceciliakang : so it appears FTC is no longer claiming 60 percent control of personal social networking? Adam Kovacevich / @adamkovac : Put differently, it's designed to make FB's critics 👏, not designed to overcome Judge Boasberg's criticisms. @johnmarknewman : I'd frankly be shocked to see this complaint dismissed. This is almost certainly headed to trial. Mike Rundle / @flyosity : Even FTC is calling out Facebook for those years they tried to get by with a shitty hybrid app instead of just writing a good native one 🤡 https://twitter.com/... @public_citizen : Facebook desperately needs to be broken up. This is excellent news from the FTC. Instagram and WhatsApp acquisitions were specifically designed to solidify Facebook's dominance - exactly what antitrust law was designed to prevent. Break them up. And Congress needs to act, too. https://twitter.com/... Ron Knox / @ronmknox : 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? @econliberties : The @FTC's amended complaint against @Facebook includes detailed proof of @Facebook's >60% market share & lays out the anticompetitive tactics they've used to grow their power. As @PharmaCheats puts it, “In this [new] complaint, the FTC shows its work.” https://www.marketwatch.com/ ... Ron Knox / @ronmknox : 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. Richard Blumenthal / @senblumenthal : The antitrust case against Facebook should've been open-and-shut—the court's decision against the FTC was wrongly-decided & a warning alarm that our antitrust laws are broken. I commend @linakhanFTC for continuing this fight despite fierce resistance from Facebook & its allies. https://twitter.com/... Rep. Pramila Jayapal / @repjayapal : Glad to see @linakhanFTC and @FTC continuing to hold tech giants like Facebook accountable while taking on their monopolistic practices. By reining in anti-competitive behavior, we can protect consumers, innovation, small businesses, and our democracy. https://twitter.com/... Sean Casten / @seancasten : There was a story making the rounds this morning about VR meetings. But make no mistake, this is the far more important Facebook news today: https://twitter.com/... Ron Knox / @ronmknox : 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. @openmarkets : By refiling its case against @Facebook, the @FTC has demonstrated that the federal government will no longer sit by as #BigTech companies engage in illegal monopolization practices. .👏👏👏👏 👏👏👏👏 .👏Thank you, @FTC 👏 .👏& @linakhanftc! 👏 .👏👏👏👏 👏👏👏👏 Ron Knox / @ronmknox : 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. @accountabletech : The new @FTC complaint gets straight to the heart of the matter: “Facebook monetizes its personal social networking monopoly principally by selling surveillance-based advertising.” #BanSurveillanceAdvertising https://twitter.com/... Amy Klobuchar / @amyklobuchar : Facebook's long history of anticompetitive behavior is no secret. I'm glad the FTC is taking renewed action and I encourage them to continue to consider all available options under the law to hold Facebook accountable. https://twitter.com/... Adam Kovacevich / @adamkovac : Reading this revised FTC FB complaint, one thing that comes through is that's long on recycled rhetorical arguments against FB, and short on the legal substance of proving a market dominance that FB's Insta and Whatsapp acquisitions caused. https://twitter.com/... Lance Ulanoff / @lanceulanoff : It's a longer complaint (by almost 30 pages) but maintains most of the core arguments revolving around WhatsApp + Instagram acquisitions and how Facebook constrained competitive access to its APIs and interface https://www.cnbc.com/... Gene Park / @genepark : damn this is more brutal than anything I've ever said lol https://twitter.com/... @breakupfbgoogle : Thank you @linakhanFTC for leading the @FTC to re-file its case against @Facebook & sending a clear signal to *all* Big Tech companies that their days of illegal monopolization practices are numbered. 👏 Check out the letter we sent to Chair Khan today to learn more 👇 https://twitter.com/... @johnmarknewman : Another theme that's emerging: FB “failed” at competing on the merits, “failure” to innovate, etc. The strategy, if I had to guess, is to disabuse the reader of any notion that FB got so big because it's just so darn great. The old complaint never used “fail__” in this way. https://twitter.com/... Ron Knox / @ronmknox : 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. @johnmarknewman : Narratives are important in antitrust litigation. The new complaint adopts more of a narrative structure, by weaving the allegations of conditional dealing into the “Industry Background” section. The old complaint focused more on FB's basic business model here. https://twitter.com/... Casey Newton / @caseynewton : @ceciliakang is there a single % in here they didn't redact? also why are they redacting Comscore data when anyone can buy it?
Related coverage identified measures such as time on-site and active users as possible ways to support the FTC's monopoly definition, making the revised pleading a test of whether those metrics can meet the court's standard.
First-order effects
Facebook must answer the amended FTC complaint by October 4, while the FTC gets a second opportunity to establish the market and dominance allegations the court previously rejected.
Facebook's defense will again contest the FTC's account of competition and consumer harm, a position it had already set out in its motion to dismiss the earlier suits.
The case raises the value of engagement and user-base measures as litigation evidence, because related coverage identified them as candidate metrics for defining the alleged monopoly.
Third-order effects
If courts accept a more fully supported market definition, antitrust enforcement against major platforms will depend less on filing a broad theory and more on proving dominance with platform-specific usage evidence.
The refile illustrates a more iterative enforcement model: agencies revise complaints around judicial pleading requirements before courts reach the underlying competition claims.
The trend: Platform antitrust cases are increasingly being shaped by the technical work of defining digital markets and proving dominance with usage metrics.
“Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” said Holly Vedova, FTC BC Acting Dir.
WhatsApp's founders left Facebook *because* Facebook made plans to integrate ads into WhatsApp. But sure, WhatsApp could have “competed” with Facebook on the basis of ad inventory. Whatever that means. https://twitter.com/...
On the recusal: “The FTC's Office of General Counsel carefully reviewed Facebook's petition to recuse Chair Lina M. Khan. As the case will be prosecuted before a federal judge, the appropriate constitutional due process protections will be provided to the company.”
BREAKING: U.S. Takes a New Stab at Facebook Antitrust Suit Seeking Break Up. FTC Claims Facebook Tried To Maintain Monopoly Through Acquisitions and Blocking Competitors Story developing.... https://www.nytimes.com/...
Even FTC is calling out Facebook for those years they tried to get by with a shitty hybrid app instead of just writing a good native one 🤡 https://twitter.com/...
Facebook desperately needs to be broken up. This is excellent news from the FTC. Instagram and WhatsApp acquisitions were specifically designed to solidify Facebook's dominance - exactly what antitrust law was designed to prevent. Break them up. And Congress needs to act, too. ht…
The @FTC's amended complaint against @Facebook includes detailed proof of @Facebook's >60% market share & lays out the anticompetitive tactics they've used to grow their power. As @PharmaCheats puts it, “In this [new] complaint, the FTC shows its work.” https://www.marketwatch.co…
The antitrust case against Facebook should've been open-and-shut—the court's decision against the FTC was wrongly-decided & a warning alarm that our antitrust laws are broken. I commend @linakhanFTC for continuing this fight despite fierce resistance from Facebook & its allies. h…
Glad to see @linakhanFTC and @FTC continuing to hold tech giants like Facebook accountable while taking on their monopolistic practices. By reining in anti-competitive behavior, we can protect consumers, innovation, small businesses, and our democracy. https://twitter.com/...
There was a story making the rounds this morning about VR meetings. But make no mistake, this is the far more important Facebook news today: https://twitter.com/...
By refiling its case against @Facebook, the @FTC has demonstrated that the federal government will no longer sit by as #BigTech companies engage in illegal monopolization practices. .👏👏👏👏 👏👏👏👏 .👏Thank you, @FTC 👏 .👏& @linakhanftc! 👏 .👏👏👏👏 👏👏👏👏
The suit submitted Thursday contains the same overall arguments as the original. But it is much longer and includes more facts and analysis that the agency says better support its allegations that Facebook is a monopoly. https://www.nytimes.com/...
The new @FTC complaint gets straight to the heart of the matter: “Facebook monetizes its personal social networking monopoly principally by selling surveillance-based advertising.” #BanSurveillanceAdvertising https://twitter.com/...
Facebook's long history of anticompetitive behavior is no secret. I'm glad the FTC is taking renewed action and I encourage them to continue to consider all available options under the law to hold Facebook accountable. https://twitter.com/...
Reading this revised FTC FB complaint, one thing that comes through is that's long on recycled rhetorical arguments against FB, and short on the legal substance of proving a market dominance that FB's Insta and Whatsapp acquisitions caused. https://twitter.com/...
It's a longer complaint (by almost 30 pages) but maintains most of the core arguments revolving around WhatsApp + Instagram acquisitions and how Facebook constrained competitive access to its APIs and interface https://www.cnbc.com/...
Staying high-level before getting into specifics, the most noticeable changes to me were FTC bumping up the significance of the threat to Facebook in the consumer shift to mobile and how Facebook used anticompetitive behavior to mitigate it. /3
Thank you @linakhanFTC for leading the @FTC to re-file its case against @Facebook & sending a clear signal to *all* Big Tech companies that their days of illegal monopolization practices are numbered. 👏 Check out the letter we sent to Chair Khan today to learn more 👇 https://twit…
Another theme that's emerging: FB “failed” at competing on the merits, “failure” to innovate, etc. The strategy, if I had to guess, is to disabuse the reader of any notion that FB got so big because it's just so darn great. The old complaint never used “fail__” in this way. https…
*This* was my fav addition to the Facebook lawsuit: (1) throws Zuckerberg's “metaverse” FUD back at Facebook and (2) rightly points out to everyone that the company cannot be trusted as its own “representations have proven meaningless on multiple occasions.” /7 https://twitter.co…
Narratives are important in antitrust litigation. The new complaint adopts more of a narrative structure, by weaving the allegations of conditional dealing into the “Industry Background” section. The old complaint focused more on FB's basic business model here. https://twitter.co…
“Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat.” https://www.ftc.gov/... https://twitter.com/.…
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/...