Facebook Files Second Motion to Dismiss the Lawsuit Brought by the FTC

The Federal Trade Commission’s (FTC) amended complaint fails to fix the deficiencies of its first attempt, and should suffer the same fate. The FTC’s fictional market ignores the competitive reality: Facebook competes vigorously with TikTok, iMessage, Twitter, Snapchat, LinkedIn, YouTube, and countless others to help people share, connect, communicate or simply be entertained. The FTC cannot credibly claim Facebook has monopoly power because no such power exists. We continuously innovate and improve our products and services to earn people’s time and attention because we have to in order to compete with rivals like TikTok which recently announced it reached 1 billion monthly active users.

After a year and a half of investigation, the FTC’s second attempt shows again this is an attack on procompetitive acquisitions the FTC itself cleared more than a decade ago. In turning antitrust law on its head, the Commission sends the message that no deal is ever truly final and that successful American businesses can be punished for innovating and improving products that give people greater value and choice. 

Therefore, today we filed a second motion to dismiss the antitrust lawsuit brought by the FTC. Below we provide a brief overview of the arguments in our motion.

Our Motion to Dismiss the FTC’s Lawsuit

The FTC Still Has No Valid Factual Basis for Claiming Monopoly Power  

  • There still is no plausible factual basis for the necessary claim that Facebook has and had a dominant share of the alleged personal social networking services (PSNS) market. To support its new, supercharged market share numbers, the FTC relies on commercial data regarding usage of three cherry-picked apps: Facebook, Instagram, and Snapchat — even though the data does not even purport to measure PSNS usage. Admitting this mismatch, the agency asks the Court to assume “arguendo” that data from a different market can establish share in the alleged market, without any facts to support that assumption. The absence of any data, from any source, for a “PSNS” market makes clear that the proposed market reflects the FTC’s litigation imperatives — not commercial realities. 
  • The FTC also still has not alleged any facts plausibly establishing that Facebook’s market position was protected by “barriers to entry” that prevented competition. Instead, the FTC’s factual allegations taken as true establish the opposite: entry was not only possible, but it in fact occurred, including by startups like Instagram and Snapchat. And, again accepting the FTC’s factual allegations as true, the FTC alleges nothing that would prevent firms with established networks — the agency names several, including YouTube (Google), iMessage (Apple), Twitter, and TikTok (ByteDance) — from becoming PSNS rivals. 
  • The FTC recycles the claim that direct evidence proves Facebook’s power. But the FTC again fails to allege facts sufficient to support a rare case of such direct evidence — that is, facts plausibly establishing that Facebook actually limited output to profitably raise prices above the competitive level. The agency effectively acknowledged before that it could not make that case. And for good reason: Facebook has never charged users any price or restricted output — not before it allegedly became a monopolist and never since.

The FTC Still Has No Valid Factual Basis for Claiming That Facebook Maintained Monopoly Power Through Unlawful Exclusionary Conduct

  • The agency’s claim requires facts establishing a plausible claim that Facebook maintained a PSNS monopoly through unlawful “exclusionary conduct.” But, as before, the amended complaint fails to allege facts showing that either Facebook’s cleared acquisitions or its lawful Platform policies violated antitrust law.
  • As to the acquisitions, the agency offers only its speculation that consumers might have better products if Instagram and WhatsApp had remained independent. Such speculation has never been a valid basis for condemning acquisitions as “exclusionary.”
  • As to the Platform allegations, the FTC simply ignores the Court’s prior, controlling and correct decision. The amended complaint reiterates rejected allegations and adds rhetoric but no material facts. As the Court explained after review of the Platform policies themselves, those policies were lawful, and the agency lacks authority to litigate long-past applications of the policies. 

The Amended Complaint Was Not Approved by Valid FTC Vote; The Chair Should Have Been Recused

  • The FTC’s vote to authorize the amended complaint was invalid, and the amended complaint should be dismissed for that reason. The new Chair cast the decisive vote in a split 3-2 decision. As Facebook demonstrated in its petition to recuse the Chair from participation in this proceeding, the Chair’s authorship of a House Judiciary Subcommittee report asserting that Facebook has violated Section 2 — among other ad hominem public charges — at the very least creates the appearance that the Chair has prejudged the facts and cannot be unbiased or impartial. 

The Commission’s case is without legal or factual support. This is as true today as it was before. We will continue to vigorously defend our company and the ability of people and businesses to choose the great products we offer.

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