Meta in trouble as US judge allows to let FTC break up the parent company


US competition watchdog Federal Trade Commission (FTC), led by Indian American Lina Khan can proceed with a breakup lawsuit against Facebook’s owner, a federal judge has ruled.

Mark Zuckerberg’s Meta, the parent of Facebook, Instagram, and WhatsApp, had asked a court to dismiss an antitrust complaint brought by the FTC for the second time. However, Judge James Boasberg said on Tuesday, January 11, that the FTC’s revised lawsuit should be allowed to proceed, The Guardian reported. said.

“Ultimately, whether the FTC will be able to prove its case and prevail at summary judgment and trial is anyone’s guess. The court declines to engage in such speculation and simply concludes that at this motion-to-dismiss stage, where the FTC’s allegations are treated as true, the agency has stated a plausible claim for relief,” wrote Boasberg of the US District Court for Columbia district, The Guadian reported.

It’s a big turnaround from last summer. In June, Boasberg granted Facebook’s motion to dismiss the case. (The company has since rebranded itself as Meta Platforms, but Facebook remains the named defendant.) The problem, he held, was that the FTC—which is seeking to reverse Facebook’s acquisitions of Instagram and WhatsApp—hadn’t provided any evidence that the company was a monopoly.

But in that same ruling, Boasberg gave a clear blueprint for how to revive the case. All the government had to do was provide evidence that Facebook has a dominant share of the social networking market.

Two months later, the agency filed a new complaint stuffed with data points from Comscore, an analytics firm that Facebook itself uses, suggesting that the company dominates the market under a variety of metrics: daily active users, monthly active users, and user time spent.

The new evidence seems to have impressed Boasberg. “In short,” he writes in the latest ruling, “the FTC has done its homework this time around.”

The FTC, under its new chair, Lina Khan, wants to force Meta to sell its photo-sharing app Instagram and its messaging service WhatsApp in one of the biggest challenges the government has brought against a tech company in decades. Its lawsuit accuses Meta of pursuing a “course of anti-competitive conduct”, the report added.

The FTC had originally sued Facebook during the previous Donald Trump administration, and its complaint was rejected by the court in June last year. The agency filed an amended complaint in August, adding more detail on the accusation that the social media company had crushed or bought rivals. Meta’s platforms are used by 2.8 billion people around the world on a daily basis.

Boasberg said that this time around the FTC has been “far more robust and detailed” in presenting its case.

He wrote: “The agency has also explained that Facebook not only possesses monopoly power, but that it has wilfully maintained that power through anti-competitive conduct, specifically, the acquisitions of Instagram and WhatsApp,” the report said.