Why Facebook is Whistling Past the Graveyard
A DC court ruling has given the FTC the power to potentially take the company apart
This was a very bad week for Meta/Facebook and its CEO, Mark Zuckerberg, though you probably wouldn’t know it from the way the company has been covered in the news. (And yes, it’s been another week of distracting news on all kinds of other fronts.) The headlines on DC federal district judge James Boasberg’s decision to allow the Federal Trade Commission’s antitrust case against Facebook to go forward were all accurate, to be sure. In the judge’s view, the commission has met the evidentiary bar in its claim that the company has a monopoly level of dominance in the personal social networking space, and that dominance may plausibly be harming consumers. Most of the media emphasized the first point about Meta’s monopolistic moves, since the company has tried to argue that it has several strong competitors. (Given all we now know about how platforms like Facebook and Instagram hurt teens, to take just one example, the consumer harm argument should be less disputed.)
What they didn’t emphasize enough was this one sentence in Boasberg’s ruling: “Although the agency may well face a tall task down the road in proving its allegations, the Court believes that it has now cleared the pleading bar and may proceed to discovery.”
Getting to discovery matters because of how much evidence the FTC already has of Facebook’s malign behavior as well as the compelling theory of the case that the agency has already articulated. To recap, back in December of 2020, the FTC sued Facebook on antitrust grounds but last summer Boasberg rejected its original complaint for lacking sufficient evidence. The FTC then amended its complaint, and the arguments it marshaled there are fearsome. In its original suit, the agency had already disclosed a 2008 internal email from Zuckerberg stating that “it is better to buy than to compete.” But what the FTC laid out in its amended complaint is a very plausible and damning narrative for why he then chose to buy a series of rising competitors, burying some and, in the cases of Instagram and WhatsApp, turning them into core products while killing off his own internal efforts to compete with them.