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FTC discusses potential antitrust case against Facebook


The Federal Trade Commission’s staff have made a recommendation to the agency’s commissioners on whether to file an antitrust complaint against Facebook, three people familiar with the agency’s probe said Thursday — a potential new milestone in Washington’s fight to rein in Silicon Valley.

The FTC’s five commissioners met to discuss a potential case Thursday afternoon, though a final decision isn’t expected for several weeks. The people discussing the case did not know whether the staff recommended suing the social network, which has faced criticism for its privacy practices and acquisitions of smaller rivals.

The people spoke on condition of anonymity because of the confidential nature of the probe. Facebook declined to comment and the FTC didn’t respond to a request for comment.

Thursday’s meeting came two days after the Justice Department filed an antitrust lawsuit against Google, and as coalitions of state attorneys general are weighing whether to bring their own complaints against the search giant. Facebook — with more than 2.2 billion users worldwide — ranks second behind Google in claiming a share of revenue from the online advertising market.

Attorneys general from multiple states are also pursuing antitrust probes against Facebook, though it is unclear whether they would be able to join the FTC’s case if the agency files one.

The FTC investigative process involves teams of antitrust attorneys, economists and litigators who can each make their own recommendation to the agency’s commissioners on whether to pursue a case. Attorneys from the agency’s Bureau of Competition marshal documents and witness interviews, while staff in the Bureau of Economics analyze economic theories and models to determine whether they have enough evidence to support a case.

Each bureau makes its own recommendation to the commissioners in support of or against a case, and sometimes the bureaus disagree. In an FTC probe of Google in 2012, for example, competition lawyers supported bringing a case challenging some of the search giant’s behavior while economists were opposed. (That investigation ended with the commissioners deciding not to file charges.)

Meanwhile, litigators in the FTC general counsel’s office can make a recommendation on whether the agency should pursue a case in federal court or before the FTC’s in-house judge. Litigation strategies differ depending on which path the FTC chooses.

FTC staff have been investigating Facebook since June 2019, and state attorneys general opened their own probe in September of that year. The state investigation, led by New York Attorney General Tish James, involves 47 attorneys general from the states, Washington, D.C., and Guam. More recently, the FTC has opened a probe into Facebook’s acquisition of GIF library Giphy, a popular source of animated graphics.

The FTC’s investigation has largely focused on Facebook’s previous acquisitions, including its 2012 purchase of photo-sharing app Instagram and the 2014 purchase of messaging service WhatsApp, two of the people said. Meanwhile, New York state has concentrated on Facebook’s conduct such as its moves to cut off rivals’ access to user data.

One potential complication of that division of duties: The FTC generally prefers to use its in-house court to bring cases involving completed mergers. That process, however, requires the FTC to proceed on its own, and would eliminate any participation by the states. If the FTC opted for its administrative proceeding, the states would be left to proceed by themselves in federal court on a more limited legal theory.

It isn’t unusual for the FTC commissioners to meet several times before reaching a decision in a major case. They met at least three times before voting 3-2 last summer to accept Facebook’s $5 billion settlement related to the Cambridge Analytica scandal.

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