A first complaint against Facebook filed by the Federal Trade Commission (FTC), for abuse of a dominant position and illegal monopoly, had been dismissed in June 2021. The second attempt was the right one.
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Facebook should not escape the trial box in the United States. Indeed, after a first rejection last June, the complaint of the Federal Trade Commission (FTC), the American policeman of competition, was finally considered admissible by a federal judge.
It paves the way for a legal battle that could have serious consequences for Facebook, mired in scandals for several years. The FTC, like the majority of American states, is calling for the dismantling of the Internet giant. Through this complaint filed in December 2020, the American regulator wants in particular to force Facebook to separate from its subsidiaries Instagram and WhatsApp.
Force Facebook to separate from Instagram and WhatsApp
Initially, the complaint filed by the FTC for abuse of dominant position and illegal monopoly had been dismissed by federal judge James Boasberg, the same magistrate who validated the second request. Believing that the argument of the American competition policeman was not sufficiently successful, he had however left the possibility to the commission headed by Lina Khan, a jurist renowned for his anti-Gafam positions, to review his copy. What she did with a new file filed last August.
In this new complaint, the FTC reiterated its demand that the American courts force Facebook to resell Instagram, an application bought for 1 billion dollars in 2012, and WhatsApp, a messaging service acquired for 22 billion in 2014. The competition authority is asking also that future acquisitions of Facebook, which has become Meta to mark its move into the metaverse and restore its image, are subject to a prior authorization procedure. To justify its requests, the FTC considers that the Menlo Park firm has “illegally bought out or buried new innovators when their popularity became an existential threat”.
Moreover, with 3.5 billion monthly users on its platforms, including Instagram and WhatsApp, Facebook enjoys an outrageously dominant position in the social media market. “Despite significant customer dissatisfaction, Facebook has been raking in huge profits for a long time, suggesting both that it has monopoly power and that its direct competitors in social media do not are not able to cross the barriers to entry and challenge its dominance”, argued the commission. Arguments that hit home with Judge James Boasberg. “The facts advanced as presented this time around are much more robust and detailed than the first time around”, he estimated.
Lina Khan, Gafam’s nightmare
This first victory for the FTC bears the seal of Lina Khan, appointed by Joe Biden to head the American antitrust. Confirmed in her new role by the US Senate in June 2021, the new boss of the commission was quick to react to the Gafam, who felt that she was not neutral towards them. But Judge James Boasberg recalled that it was not his duty to be, thus rejecting Facebook’s arguments on this point. “While Ms. Khan has expressed views on the monopoly power of Facebook, these positions do not mean that she acts in this way due to personal animosity or a conflict of interest”, he said.
Now that “the FTC has done its homework”, as the judge wrote, the American legal machine will be set in motion with a trial on the horizon that could prove perilous for Facebook. But very clever is the one able to predict the outcome of this case… “The FTC will have a lot to do to prove its allegations”said Judge James Boasberg. The magistrate thus makes no prognosis: “Will the FTC be able to provide sufficient evidence and win its case? It’s impossible to say.”
Still, the prospect of this trial has darkened the horizon of Facebook a little more, whose image has continued to deteriorate in recent months since the revelations of whistleblower Frances Haugen, a former Facebook computer specialist specializing in in algorithms. After slamming the door of the group last spring, the young woman leaked thousands of internal Facebook documents to the American stock market policeman, the SEC (Securities and Exchange Commission), and to journalists around the world, thus giving rise to the scandal. dubbed Facebook Files. Through leaked documents, Frances Haugen accuses Facebook of “Put profit before safety” of its users. In this delicate context, the American giant has suffered several defections among its most senior leaders in recent months, like Fiji Simo, who took the reins of Instacart last summer.
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