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FTC Alleges ‘Buy-or-Bury Scheme’ in Amended Facebook Complaint

After repeated failure to “develop innovative mobile features,” Facebook “resorted to an illegal buy-or-bury scheme to maintain its dominance,” alleged the FTC Thursday in an amended complaint in its antitrust case against the company in docket 1:20-cv-03590. The commission 3-2 authorized filing of the complaint with the U.S. District Court for the District of Columbia.

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U.S. District Judge James Boasberg dismissed the case in June, allowing the agency to re-plead (see 2106280057). Filed by Thursday’s deadline, the amended complaint includes “detailed statistics showing that Facebook had dominant market shares in the U.S. personal social networking market,” the agency said. The complaint provides statistics about monthly U.S. users of Facebook and Instagram and daily time spent on each platform. The exact statistics are redacted in the complaint.

The agency said Facebook “unlawfully acquired innovative competitors with popular mobile features that succeeded where Facebook’s own offerings fell flat or fell apart.” It alleged the platform “lured app developers to the platform, surveilled them for signs of success, and then buried them when they became competitive threats.”

Facebook said in a statement it’s “unfortunate that despite the court's dismissal of the complaint and conclusion that it lacked the basis for a claim, the FTC has chosen to continue this meritless lawsuit. There was no valid claim that Facebook was a monopolist -- and that has not changed.” It defended its acquisitions of Instagram and WhatsApp, saying the agency’s “claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final.” Facebook fights to “win people’s time and attention every day, and we will continue vigorously defending our company,” the company said.

It’s “bad policy to undermine the integrity of the premerger notification process established by Congress and the repose that it provides to merging parties that have faithfully complied with its requirements,” Commissioner Christine Wilson wrote in a dissenting statement. She noted her vote doesn’t reflect a decision on a potential vote on Facebook’s request for Chair Lina Khan to recuse herself.

The FTC Office of the Secretary dismissed Facebook’s petition for recusal, the agency said: “The FTC’s Office of General Counsel carefully reviewed Facebook’s petition to recuse Chair Lina M. Khan. As the case will be prosecuted before a federal judge, the appropriate constitutional due process protections will be provided to the company.”

Big tech companies like Facebook shouldn’t “have free reign [sic] to impose their will on the market, and they must be held accountable when they attempt to do so,” Senate Antitrust Subcommittee Chair Amy Klobuchar, D-Minn., said in a statement, encouraging the agency to exercise all available options to hold the company accountable.

The refiled complaint “strengthens” the agency’s case, Public Knowledge said. “This updated complaint should completely address Judge Boasberg’s concerns with its ample evidence of Facebook’s market power and its anticompetitive behavior,” said PK Policy Counsel Alex Petros, calling for congressional action updating antitrust laws.