Facebook Faces Revived FTC Antitrust Case

by sam

Samuel Case, FISM News


The tech giant Facebook is once again in the crosshairs of the Federal Trade Commission for engaging in monopolistic behavior. The FTC is accusing the social media company of resorting “to an illegal buy-or-bury scheme to maintain its dominance.”

This comes close to two months after a federal judge tossed two antitrust complaints brought by the FTC against Facebook, for failing to provide enough evidence that Facebook was a monopoly. However the judge left the door open for new complaints and FTC has returned with more fleshed out filing. 

The regulator accused Facebook of buying up strong competitors whenever the company believed it was unable to outperform them on its own. “Facebook found that it lacked the business talent and engineering acumen to quickly and successfully integrate its outdated desktop-based technology to the new era of mobile-first communication,” the Commision said in a news release. “Unable to maintain its monopoly or its advertising profits by fairly competing, Facebook’s executives addressed this existential threat by buying up the new mobile innovators, including its rival Instagram in 2012 and mobile messaging app WhatsApp in 2014, who had succeeded where Facebook had failed.”

Facebook is also accused of engaging in performing a “bait and switch” on third party developers that relied on Facebook Platform, which offers tools and services for software developers. The complaint says the company deceptively marketed the platform as an “open space” in order to free “itself from competition during a critical period of technological change.”

. . . after starting Facebook Platform as an open space for third party software developers, Facebook abruptly reversed course and required developers to agree to conditions that prevented successful apps from emerging as competitive threats to Facebook. By pulling this bait and switch on developers, Facebook insulated itself from competition during a critical period of technological change. Developers that had relied on Facebook’s open-access policies were crushed by new limits on their ability to interoperate. 

Facebook has until October 4 to respond to the complaint. “There was no valid claim that Facebook was a monopolist — and that has not changed. Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful,” a Facebook spokesman said in a statement. “The FTC’s claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final. We fight to win people’s time and attention every day, and we will continue vigorously defending our company.”