The Facebook case, first filed in December, presents early evidence for the president of the US Federal Trade Commission, Lina Khan, who was appointed head of the agency in June by President Joe Biden.
US antitrust officials resubmitted their monopoly lawsuit against Facebook Inc. on Thursday, seeking to salvage the landmark case that a judge threw out in June.
The Federal Trade Commission filed the new complaint in federal court in Washington, alleging that Facebook violated antitrust laws by buying Instagram and WhatsApp to remove them as competitors.
Shares of Facebook reversed a previous gain, falling less than 1% to $ 355.28 as of 11:34 a.m. in New York. The stock is up about 30% this year.
The agency is trying to revive the case after US District Judge James Boasberg dismissed it in June, saying the agency did not provide enough details to support its claim that Facebook has a monopoly on the social media market. Boasberg had given the FTC 30 days to correct the error and resubmit, and the commission won an extension until Aug. 19.
The Facebook case, first filed in December, presents early evidence for FTC President Lina Khan, who was appointed head of the agency in June by President Joe Biden. Khan is a prominent advocate for taking a stronger antitrust stance against business and is already taking steps to strengthen the agency’s authority.
Facebook seeks to prevent Khan from participating in the case, arguing that his academic writing about the company and his work on the House’s antitrust panel, which investigated Facebook and other tech platforms, showed that he is biased.
The lawsuit is part of a broad effort by lawmakers and competition law enforcement to curb the power of America’s biggest tech companies.In addition to the Facebook case, the Justice Department and state attorneys general around The country has multiple lawsuits pending against Google, while Democrats and Republicans on Capitol Hill are pushing a series of bills that would impose new restrictions on how companies do business.
Supporters of Facebook’s lawsuit said Boasberg’s decision illustrates the legal barriers the government faces in bringing monopoly cases. Proponents of the reform say that court decisions over decades have effectively allowed dominant companies to engage in anti-competitive tactics and that Congress must grant new authority to law enforcement.
Boasberg didn’t just dismiss the FTC’s case. He also dismissed a side case from New York-led state attorneys general, without giving them a chance to try again. The judge said the states waited too long to challenge the Facebook acquisitions. Facebook bought Instagram in 2012 and WhatsApp in 2014. The legal doctrine that applied to the states does not apply to the FTC.
Boasberg also narrowed the FTC case. In addition to trying to undo the two agreements, the FTC said that Facebook tried to thwart competition by allowing third-party applications to only connect to its platform on the condition that they do not compete with Facebook and do not connect with other social networks.
The FTC argued that the policy deterred apps from offering features that could compete with Facebook and prevented promising apps from becoming competitors that could threaten Facebook’s monopoly.
Boasberg dismissed that part of the FTC case. The judge wrote that under existing antitrust law established by the courts, companies are not required to do business with other firms and can “refuse to negotiate” even to prevent a rival from competing.
“A monopolist has no obligation to deal with its competitors, and refusal to do so is generally legal,” Boasberg wrote. “The FTC, therefore, can get nowhere if it recasts Facebook’s adoption of a policy of refusing to deal with all competitors as running an illegal monopoly maintenance scheme.”