Judge Rejects Meta’s Plea to Send FTC Antitrust Suit to Trash Heap
Though Judge James Boasberg sided with the FTC, he said the "commission faces hard questions about whether its claims can hold up in the crucible of trial. Indeed, its positions at times strain this country’s creaking antitrust precedents to their limits.”
November 14, 2024 at 01:22 PM
4 minute read
A federal judge on Wednesday ruled that the Federal Trade Commission’s 2020 lawsuit against Meta will advance to trial, rejecting the social media giant’s arguments that the passage of time has made what was from the outset a weak case even flimsier.
In a snappily written 92-page opinion, James Boasberg, chief judge for the District of Columbia, rejected Meta’s motion for summary judgment, finding that the FTC had presented evidence sufficient for a reasonable fact finder to conclude that Meta, parent of Facebook, had illegally monopolized the market for “personal social networking services.”
That finding is a setback for Menlo Park, California-based Meta’s all-star legal team, which includes the litigation boutique Kellogg, Hansen, Todd, Figel & Frederick as well as Wilmer Cutler Pickering Hale and Dorr; Cravath, Swaine & Moore; and Davis Polk & Wardwell.
Yet Boasberg’s opinion also gave Meta's attorneys plenty of grist for optimism that they will prevail at trial. For example, the judge said the FTC's victory “does not obscure the fact that the commission faces hard questions about whether its claims can hold up in the crucible of trial. Indeed, its positions at times strain this country’s creaking antitrust precedents to their limits.”
The crux of the agency’s case is that Meta monopolized the social media market by purchasing Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014 and then used anticompetitive practices to thwart competition.
If the FTC prevails at trial, one of the potential remedies would be to force Meta to divest Instagram and WhatsApp. But in his opinion, Boasberg cast proceedings up to this point as more of a draw than as a prelude to the FTC's prevailing at trial.
“While the parties’ legal jousting is both impressive and comprehensive, it leaves no clear victor,” he wrote.
For the FTC, he wrote, even demonstrating the existence of a monopoly “is no easy sail, and the FTC has chosen to navigate into gusty winds,” a reference to “the complexities of a platform market that offers its products to end users at no cost while charging for advertising.”
On top of that, he wrote, “time and technological change pose serious challenges to the market analysis here.”
In a statement to the Washington Post, Meta spokesman Chris Sgro said, “We are confident that the evidence at trial will show that the acquisitions of Instagram and WhatsApp have been good for competition and consumers.”
FTC spokesperson Douglas Farrar told the Post that the case “represents a bipartisan effort to curtail Meta’s monopoly power and restore competition to ensure freedom and innovation in the social media ecosystem.”
Boasberg opened his opinion by noting that the 2010 movie about Mark Zuckerberg’s creation of Facebook was called “The Social Network,” a title that by itself demonstrates how dramatically the social media landscape has shifted in the intervening years.
The company “argues that the market with which it was once nearly synonymous does not even exist,” Boasberg wrote. “Gazing across an online landscape teeming with companies catering to every conceivable interest, Meta sees a bloody battle for users’ time and attention in which its products face withering competition.”
The FTC filed its suit in late 2020, in the waning days of President Donald Trump's first administration, but Boasberg the following year dismissed it, citing insufficient evidence. “It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist,” he wrote.
But he gave the FTC, which had just come under the leadership of Chair Lina Khan, an opportunity to refashion its complaint. The agency did so, and in 2022 Boasberg denied Meta’s motion to dismiss, writing that the FTC had provided “more robust and detailed” evidence to support its monopoly claims.
Boasberg noted in Wednesday’s opinion that the evidentiary record in the case now runs thousands of pages, much of it packed with thick analysis of antitrust law. But the judge, nominated for the court by President Barack Obama in 2011, seemed to savor the challenge of plowing through the intricacies in an entertaining way.
And he seemed to appreciate when counsel for the parties had done the same. For example, in his opinion he noted that the FTC had cast Meta as being in a frenzy to buy WhatsApp, fearful that a rival would strike a deal first and refashion the messaging app into a competitor to Facebook.
“Defendant amusingly contends that the FTC’s narrative ‘makes Jack-and-the-Beanstalk sound like a documentary,’” the judge wrote.
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