The initial complaint for anti-competitive practices, filed in December, threatened the California group with having to part ways with Instagram and WhatsApp, but Washington federal judge James Boeasberg said it lacked “concrete evidence on the real power of Facebook”.
The revised complaint gives more details on the means used by the firm to oust competition, especially in the early 2010s, when the mobile internet market emerged.
“Facebook lacked the technical skills and talents necessary to survive the transition to mobile,” said Holly Vedova, acting director of the FTC’s Competition division, quoted in a statement.
“After failing in the competition against new innovators, Facebook illegally bought them out or buried them when their popularity became an existential threat,” she continued, referring to the Instagram app and WhatsApp messaging.
As of June 30, some 3.5 billion people worldwide frequent at least one of the California group’s four services every month, Facebook, Instagram, WhatsApp and Messenger.
According to the new complaint, Facebook’s monopoly is “protected by significant barriers” to entry into its market, so that “even a new entrant, with a better product, cannot succeed in the face of the effects of networks whose enjoys the dominant social network ”.
“Personal social network”
“We are reviewing the amended FTC file and will speak in more detail soon,” Facebook responded on Twitter. The judge had given the regulator thirty days to present new elements likely to allow the legal action to continue.
James Boasberg notably criticized the initial file for lacking in evidence and not clearly defining the market affected by a so-called Facebook monopoly. According to him, the federal agency based its complaint on a vague assertion according to which Facebook controls more than 60% of the market of social networks, without “indicating precisely what it measures”.
This time around, the FTC argues that “personal social media is a unique and distinct type of online service,” and a market controlled over 65% by Facebook, with its main platform and Instagram – thus a monopoly.
As these services allow users “to interact with their personal connections, it is very difficult for a new entrant to compete with a personal social network where users already have friends and family,” argues the revised complaint.
According to this definition, the very popular TikTok application is “a content distribution and consumption service that cannot replace a personal social network”, considers the agency’s legal team. Facebook considers on the contrary that the platform owned by a Chinese group is a major rival and proof that consumers have alternatives.
Investigations and prosecutions for abuse of a dominant position are also underway in the United States and elsewhere against other tech giants: Google, Apple and Amazon.