US renews ‘buy or bury’ charges against Facebook
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The US Federal Trade Commission has reconsidered its antitrust complaint against Facebook, doubling down on its accusations that the social media group maintains monopoly power and uses a “buy or bury” strategy to neutralize competitors.
Initially, the original lawsuit was filed in December, accusing Facebook of carrying out a “long path of anti-competitive behavior,” as it sought to force Facebook to back off its acquisitions of Instagram and WhatsApp, made in 2012 and 2014 in exchange for $1 billion and $19 USD. billion, respectively.
However, a federal judge dismissed the complaint in June in a major blow to the agency, arguing that it “failed to provide sufficient facts to show that Facebook had monopoly power over the social networking market.”
The revived lawsuit contains arguments similar to the original but in more detail to support its claims of Facebook dominance. It also said the company had pursued an “anti-competitive acquisition strategy” and had “anti-competition parole policies” designed to crush competitors by denying them access to their platform. The new complaint totals 80 pages, up from the original 53 pages.
“Facebook lacked the business acumen and technical talent to survive the move to mobile. After failing to compete with new innovators, it bought or illegally buried it when it was bought or buried,” said Holly Fedova, acting director of the FTC’s Office of Competition. Its popularity has become an existential threat.
“This behavior is no less anti-competitive than if Facebook had bribed emerging app competitors not to compete,” Vidova added.
The case is one of the first big tests for new FTC chief and prominent tech critic Lina Khan. Facebook sought to disqualify her from any involvement in the case due to her past criticism of the company while working as an academic. In a statement, the FTC said its general counsel reviewed and dismissed Facebook’s petition.
In an effort to demonstrate Facebook’s market dominance, the FTC said in the filing that the Facebook and Instagram user numbers, which were revised, were “tens of millions” higher than the monthly numbers for Snapchat, the social media app it says is the next biggest.
“There is no other personal social networking provider in the United States that remotely comes close to Facebook,” she said. It added that Facebook’s share of US users’ time spent on personal social networking services has exceeded 80 percent since 2012, citing data from ComScore.
He also argues that Facebook’s dominance combined with its broad and interconnected user base creates a “significant barrier to entry” for competitors. In particular, he cites Facebook’s internal documents that say it recognizes the difficulty competitors with similar social products have to challenge an “incumbent on a dominant scale.”
The Federal Trade Commission (FTC) voted 3-2 along partisan lines to file the new complaint. Facebook said in a tweet that it was reviewing the forwarded complaint but would have “more to say soon.”
Facebook’s critics said the rejection of Judge James Boasberg’s first complaint in June highlighted the difficulty of applying the current antitrust framework to technology companies like Facebook that offer their digital services for free. In his ruling, Boasberg said that monopoly power was “a technical term under federal law with a specific economic meaning”.
But Khan and others have argued that these groups can still abuse monopoly power, for example by insulting services or requiring customers to hand over more personal data.
Boasberg also dismissed a similar case brought by a group of 46 states and other jurisdictions – led by New York Attorney General Letitia James – on the grounds that any alleged abuses occurred well before then.