The FTC filed its case against Facebook
One of the most powerful regulatory agencies in the United States government, the Federal Trade Commission (FTC), dismissed the historic antitrust lawsuit against Facebook, claiming that it is a monopoly that harms competition and harms consumers.
The move comes after a judge dismissed the FTC’s preliminary lawsuit in June too vaguely, which at the time was a huge win for Facebook. In response, the FTC tried to file a lawsuit-and instead of coming up with a new approach, it retained the main arguments against Facebook but supported it in more detail. This is another sign that the pushing management to enter the power of Facebook and other major tech companies like Amazon and Apple will not slow down if they meet obstacles.
The revised suit includes new evidence about how the company is said to be operating monopolistic behavior to crush its competitors and keep its users on its platform without enough pressure to improve the quality of its products. The significance of the FTC controversy is that Facebook has failed to make meaningful innovations in its mobile app itself over the past few years. However, it ran what the FTC said was an illegal “buy-or-bury” strategy where it shut down external apps by limiting their access to the Facebook platform or acquired apps such as Instagram and WhatsApp successful competitors.
The lawsuit alleges that Facebook also “lured” app developers to third-party competition threats, such as Path and Circle, by inviting them to be part of Facebook’s open platform. Once these developers have become confident in the access they are offered on Facebook, Facebook will then simply move the course, claiming the suit. Later, the FTC said, it all hurt consumers by continuing to be trapped in Facebook’s social media ecosystem, with fewer alternative apps.
“Facebook lacks the business acumen and technical talent to survive the mobile move. After not being able to compete with newcomers, they are illegally bought or buried on Facebook when their popularity becomes one that has threat, ”Holly Vedova, FTC Bureau of Competition acting director, said in a press release announcing the lawsuit on Thursday.
A few hours after the new case was filed on Thursday, Facebook tweet a thread as an answer.
The company argued that there was no “valid claim” that Facebook was a monopolist, and pointed out that the FTC had cleaned up the WhatsApp and Instagram company’s gains in the original case.
“It is unfortunate that even though the court dismissed the complaint and concluded that it was not a basis for a claim, the FTC chose to pursue it as an unreasonable case,” Facebook wrote.
The company is also planning a splashy release of its product new virtual reality app conferencing app – complete with Facebook CEO Mark Zuckerberg hit on CBS – on the same morning that this new lawsuit is expected to fall. Surprisingly, Facebook’s new virtual reality conference tool is similar in many ways to existing software from small companies, showing how current antitrust laws won’t stop techs. company from copying each other in real time.
The new lawsuit also responds to a Facebook petition for Lina Khan, the chairman of the FTC, who exited himself because of what the tech company said was a conflict of interest because of his past academic work criticizing the market power of tech companies like Amazon. Others lawmakers like Sen. Elizabeth Warren (D-MA) has criticized the push against Khan as an attempt to “bully” the FTC. But it doesn’t seem to work – the FTC reiterated in the new suit that there is no plan for Khan’s move.
Previously, Facebook said the success of companies like TikTok and Snap proved that there was healthy competition in the social media industry. However, this retrial claims that TikTok is not really a competitor to Facebook because it was used primarily to “share the content of the video with an audience that did not personally know the poster, rather than connect and personally interact with friends and family. ”
It’s also very easy to say if this lawsuit will be successful, and how significant it will be to impact Facebook’s business. Facebook, which has many resources to fight the case, will provide many strong defenses as to why it is not a monopoly. But the lawsuit now shows that the FTC, especially Khan at the helm, will not back down.
Updated August 19, 12:27 pm PT: This article was updated to include comment from Facebook, where it was posted on Twitter.