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The Federal Trade Commission filed an amended complaint against Facebook on Thursday that accused the social media giant of engaging in an illegal “buy-or-bury” scheme to beat out competition after failing to innovate on their own.
“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,” Holly Vedova, the acting director of the FTC’s Bureau of Competition, said in a statement. “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.”
The amended complaint comes after a federal judge in June dismissed the FTC’s original complaint on grounds that included the government failing to justify why it had waited so long to sue Facebook over its Instagram and WhatsApp acquisitions and not providing sufficient evidence of Facebook’s market power. At the time, the FTC was given an opportunity to file an amended complaint, which arrived on Thursday.
The updated complaint alleges that “no other personal social networking provider in the United States remotely approaches Facebook’s scale,” allowing the tech giant to make “staggering profits.” But to maintain that scale, the FTC states, Facebook had to buy up competitors in the mobile space or “crush” them by “enforcing restrictive policies that deny potential competitive threats access to Facebook’s enormous base of personal social networking users.”
The complaint also noted that platforms like TikTok, YouTube, Spotify, Netflix and Hulu should not be considered part of Facebook’s market because users are primarily watching or listening to videos and music, rather than communicating with friends and family. Defining a specific market that Facebook has dominated through anti-competitive means is the government’s core challenge at the first stage of this case. Accordingly, the FTC aims to narrow the target market by excluding other tech giants.
A separate lawsuit from more than 40 states was thrown out by the same judge back in June and is now on appeal.
The FTC’s amended complaint marks the first big move in court by the agency under the leadership of its new chairperson, Lina Khan.
A spokesperson for Facebook did not immediately respond to a request for comment, but the company said in a tweet that it was reviewing the complaint.
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