FTC Accuses Facebook of Violating Antitrust Laws With ‘Buy or Bury’ Scheme


The Federal Trade Commission amended its antitrust complaint against Facebook today with “additional data and evidence to support the FTC’s contention that Facebook is a monopolist that abused its excessive market power to eliminate threats to its dominance” in the mobile era.

US District Judge James Boasberg dismissed the FTC’s complaint in June over a lack of evidence, the Associated Press reported at the time, but the case brought against Facebook by the commission and a coalition of state attorneys general was allowed to continue.

This amendment is the FTC’s attempt to make its case more compelling. The commission said in the filing that it seeks “a permanent injunction and other equitable relief” against Facebook “to remedy and prevent its anticompetitive conduct and unfair methods of competition.”

FTC Bureau of Competition Acting Director Holly Vedova didn’t mince words in a statement that accompanied the new filing:

“Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat. This conduct is no less anticompetitive than if Facebook had bribed emerging app competitors not to compete. The antitrust laws were enacted to prevent precisely this type of illegal activity by monopolists. Facebook’s actions have suppressed innovation and product quality improvements. And they have degraded the social network experience, subjecting users to lower levels of privacy and data protections and more intrusive ads. The FTC’s action today seeks to put an end to this illegal activity and restore competition for the benefit of Americans and honest businesses alike.”

The commission said the acquisitions of Instagram and WhatsApp are prime examples of Facebook buying up potential rivals to its social network. It also says the company pulled a “bait and switch” on developers by changing the terms of its Facebook Platform without any warning.

The FTC said its filing “also provides new direct evidence that Facebook has the power to control prices or exclude competition; significantly reduce the quality of its offering to users without losing a significant number of users or a meaningful amount of user engagement; and exclude competition by driving actual or potential competitors out of business.”

This amendment also claims “Facebook continues to monitor the industry for competitive threats to its personal social networking monopoly” and “is likely to impose anticompetitive conditions on access to its platform and seek to acquire companies it perceives as potential threats.”

That might already have happened. Facebook CEO Mark Zuckerberg has repeatedly pushed the idea of the “metaverse” as the future of the internet. A core aspect of the metaverse is virtual reality—a category Facebook entered by acquiring Oculus for $2 billion in 2014.

The company has continued to invest in the social networking capabilities of Oculus in the years since. Earlier today, it announced a new feature called Horizon Workrooms that’s dedicated to remote collaboration, which could seem like poor timing in retrospect.

The FTC’s amended complaint received support from US Senator Amy Klobuchar (D-MN) who said in a statement:

“Facebook’s long history of anticompetitive behavior is no secret. The company’s acquisitions of Instagram and WhatsApp have made the digital landscape less competitive, ultimately harming consumers. Big technology companies like Facebook should not have free reign to impose their will on the market, and they must be held accountable when they attempt to do so. I’m glad the FTC is taking renewed action to stop Facebook’s anticompetitive behavior and I encourage them to continue to consider all available options under the law to hold Facebook accountable.”

Facebook said this morning that it’s “reviewing the FTC’s amended complaint and will have more to say soon.”

This isn’t the only time the FTC and Facebook have butted heads this month. FTC Bureau of Consumer Protection Acting Director Samuel Levine sent a letter to the company on Aug. 5 that criticized it for saying that a ban on NYU researchers was required as part of a 2019 deal Facebook struck with the FTC.


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