FTC files amended complaint in antitrust case against Facebook

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The US Federal Trade Commission (FTC) filed an amended complaint with additional data and evidence against Facebook on Thursday, continuing its antitrust case against the social media giant.

The amended complaint comes after US District Judge James Boasberg dismissed the FTC’s initial complaint due to lack of evidence in June but allowed the agency to submit an amended complaint after resolving the issues in the complaint. FTC Bureau of Competition Acting Director Holly Vedova said: “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.”

The amended complaint alleged that Facebook acquired new innovators that thrived in areas where Facebook had failed. It complemented this “anticompetitive spending spree with an opened-first-closed-later scheme,” which helped establish its monopoly by blocking budding competitors. This monopoly over personal social networking has damaged competition and reduced consumer choice. Furthermore, the complaint claimed that due to a lack of genuine competition, Facebook perfected a “surveillance-based advertising model” and imposed heavy burdens on its users.

Moreover, the complaint alleged that Facebook pulled a “bait and switch” on developers by altering the conditions of its Facebook Platform, thereby limiting their capacity to interoperate. The FTC said that the amended complaint includes fresh “direct evidence” that Facebook has the capacity to manipulate prices, lower the quality of its services without losing a large number of users, and eliminate competition by putting current or future competitors out of business.

However, the FTC brought the amended complaint with a 3-2 vote. In a separate statement of dissent, Commissioner Christine Wilson said that Facebook’s acquisition of Instagram and WhatsApp constitute the primary claims in the amended complaint. Since the FTC had previously examined and approved these transactions pursuant to a premerger notification, she believed that undermining the procedure established by Congress is “bad policy.”

In response to the amended complaint, Facebook tweeted that “the FTC’s claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final.”

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