Facebook is seeking to throw out federal antitrust suits by the FTC and state attorneys general, arguing that enforcers failed to show it has a monopoly and waited too long to challenge its acquisitions of Instagram and WhatsApp.
“You only have to look at your phone to know that the government’s assertion that Facebook monopolizes ‘personal social networking services’ doesn’t make sense,” said Christopher Sgro, a company spokesperson. “The government ignores these realities and attempts to rewrite history with its unprecedented lawsuit.”
He cited TikTok, Apple’s iMessage, Twitter, Snapchat, LinkedIn and Google’s YouTube as competitors to Facebook that wouldn’t fit into the government’s definition of social networking.
No monopoly here: In court filings Wednesday, Facebook took aim at how the FTC and states have defined its alleged monopoly — as a free social networking product. Defining the market in question is a key element of any antitrust case.
The FTC and states “do not say whether services that are mentioned in the complaint, like Twitter and Snapchat, and other well-known services that are not, like TikTok and Pinterest (among many others), are included in or excluded from the market,” the company said. “Facebook is improperly left to guess.”
Because Facebook is free to users, the government also can’t show that the company has raised prices or restricted output, the social network said, two standards that courts commonly require to show a company has a monopoly.
Facebook also argued that the states waited “far too long” to sue over its purchases of the photo-sharing app Instagram in 2012 and communications platform WhatsApp in 2014. It notes that federal regulators passed on a chance to oppose those acquisitions at the time.
“The prejudice to Facebook if this challenge were allowed to proceed now, after Facebook invested billions of dollars and set business strategy in reliance on the governments’ decisions, [is] apparent,” the company said.
The FTC also doesn’t address in its complaint why the agency’s original reviews of the Instagram and WhatsApp mergers were deficient, Facebook said.
The FTC “has not alleged that it was misled or otherwise lacked access to the relevant information. It just ignores its own decisions, failing to offer any valid explanation for its about-face,” the company said.
Why it matters: Motions to dismiss like the ones filed by Facebook are a common legal maneuver used to kill off cases early, and are frequently used in antitrust cases. Companies often succeed in getting private antitrust cases dismissed, though it is much less common for suits by federal or state enforcers to be thrown out in the initial stages.
The motions can also add as much as an additional year to the litigation because the court must resolve them before the substantive parts of a case, such obtaining documents and deposing witnesses, can begin.
The FTC and states will respond to Facebook’s arguments in their own filing next month. U.S. District Judge James Boasberg, who is overseeing the case in D.C., will probably schedule a hearing on the motions before issuing his decision.