A court in Washington has ruled that the Federal Trade Commission may press ahead with its lawsuit against the Facebook group Meta. This clears the way for a lawsuit that could end with the breakup of the group.
The background: Market power of Facebook
The complaint of the supervisory authority is justified with the dominant market position of the Facebook group Meta. The Federal Trade Commission argues that the group can dictate prices in the social networking sector due to its market power. It also points out that the purchase of WhatsApp and Instagram can be understood as an attempt to secure its own monopoly position – and thus constitutes unfair competition.
That Facebook does indeed hold a dominant position is probably largely undisputed. The case is therefore special not because of the accusation, but because of the fact that the U.S. authority is aiming to break up the group. If this outcome comes at the end of the process, the economic world is likely to change permanently, as this would jeopardize the business models of most digital groups, which aim precisely to tie up as much market power as possible.
Meta filed an appeal
The Facebook group Meta has tried to avert another hearing. To this end, it filed a motion accusing the Federal Trade Commission of not having sufficiently substantiated its complaint. Furthermore, Meta attempted to challenge the legitimacy of the lawsuit by making accusations of bias against the chairwoman of the regulatory agency, Lina Khan, who before her time at the Federal Trade Commission was scientifically concerned with monopoly formations and took a critical stance. Particularly well known is her work Amazon’s Antitrust Paradox, in which she points out that U.S. antitrust regulations are not suitable for adequately regulating the anti-competitive mechanisms of platform-based offerings such as Amazon, which according to their structure are in the interests of consumers.
The petitions were rejected by the competent court, so the way is clear for further negotiations. For the Federal Trade Commission, this is already a success. An initial lawsuit filed while the Trump administration was still in power was rejected by the court, so there was no trial.
Proceedings could take a long time
In all likelihood, it will be years before a final decision is reached. Meta was emphatically calm after the decision, pointing out that the accusations could hardly be substantiated on the basis of two company takeovers dating back several years. Further developments in this case remain to be seen. In any case, the trial could be groundbreaking.