A federal judge on Tuesday allowed the federal trade commission’s no-confidence motion to proceed, rejecting Facebook’s request to dismiss the case and giving the agency a major victory in its quest to reduce the power of the largest tech companies.
Columbia District U.S. District Court Judge James Bosberg said last year that the FTC did not provide sufficient evidence that the company, which has given its name to Meta, has a monopoly on social media and has abused that power by causing harm. The competition agency reissued the case in August and on Tuesday Judge Bosberg said he had provided better support and the lawsuit should move forward.
But he also included some warnings. Judge Bosberg said the agency could proceed with its claims that the company abused its monopoly power through acquisitions, which the agency described as a “buy-or-sell” strategy. He denied the agency’s allegation that Facebook violated the no-confidence motion by cutting off third parties from its platform.
The facts provided by the agency, he said, are “stronger and more detailed than ever, especially in the context of the defendant’s alleged monopoly profile.”
The judge’s decision is a major step forward for regulators fighting a powerful army of lobbyists and litigators working to protect empires created by tech giants such as Amazon, Apple, Facebook and Google. Their combined market value has exceeded 7 trillion.
Government officials point to this concentration of power for antithetical behavior that could harm competitors and harm consumers. The Justice Department and dozens of states have filed lawsuits against Google, accusing the company of stifling competition in search and advertising technology.
In a rare bipartisan deal, Democrats and Republicans have rallied around the no-confidence motion and this week, the Senate announced it would begin voting on a new no-confidence law aimed at the tech sector. And President Biden has filled federal distrust agencies with vocal critics of the technology giants, including FTC chairman Lina Khan, whom Facebook has targeted in its move to dismiss the lawsuit.
Although success for the agency is not certain, litigation can take years to complete. The search process usually takes several months before the case goes to trial.
Judge Bossberg said, “Although the agency may have to face a heightened task at the bottom of the road to prove its case, the court believes that it has now cleared the argument bar and can proceed with the search,” Judge Bossberg said. .
Holly Vedova, director of the agency’s Bureau of Competition, said in a statement: “FTC staff has filed a strong revised complaint and we are awaiting trial.”
Facebook said the judge’s decision was a partial victory, as it rejected a claim that the company harmed the competition by allowing competitors such as the video service Vine to access data and features from the Facebook platform. That practice ended in 2018, the judge said.
“Today’s decision narrows the scope of the FTC’s case by denying claims about our platform policies,” said Chris Sgro for Meta. “We are confident that the evidence will reveal the fundamental weakness of the claims. Our investments in Instagram and WhatsApp have transformed them into what they are today. They’ve been good for the competition and good for people and businesses who choose to use our products. “