27th March 2023

WASHINGTON—A federal decide on Tuesday dominated the Federal Commerce Fee can transfer ahead with its revised antitrust case alleging Meta Platforms Inc.’s Fb FB 1.92% unit is abusing a monopoly place in social media, rejecting the corporate’s request to dismiss the federal government’s amended lawsuit.

“Though the company might effectively face a tall process down the street in proving its allegations, the court docket believes that it has now cleared the pleading bar and should proceed to discovery,” U.S. District Decide James Boasberg in Washington, D.C., mentioned in a 48-page opinion.

The FTC first filed its antitrust case towards Fb close to the tip of 2020, however Decide Boasberg dealt the fee a authorized blow final June, dismissing the lawsuit on the grounds that it didn’t provide enough allegations that the social-media big engaged in illegal monopolization.

The FTC responded with a brand new model of its grievance, which provided longer, extra detailed allegations towards the corporate.

The decide’s Tuesday ruling mentioned the FTC can proceed with its core allegation that Fb unlawfully sought to suppress competitors by shopping for up potential rivals such because the messaging platform WhatsApp and image-sharing app Instagram. The fee is searching for to unwind these offers.

Members of Congress have likened Fb and Instagram’s ways to that of the tobacco trade. WSJ’s Joanna Stern opinions the hearings of each to discover what cigarette regulation can inform us about what could also be coming for Huge Tech. Photograph illustration: Adele Morgan/The Wall Avenue Journal

The decide mentioned the FTC’s rewritten lawsuit did a greater job of alleging that Fb possessed monopoly energy and willfully maintained it by means of anticompetitive conduct. For the needs of deciding whether or not to dismiss the case earlier than trial, Decide Boasberg needed to assume the federal government’s allegations have been true.

The decide additionally rejected Fb’s argument that new FTC Chairwoman Lina Khan ought to have recused herself from taking part within the fee’s resolution to refile the lawsuit, which got here on a party-line 3-2 vote. The corporate had argued that Ms. Khan, a number one progressive critic of massive tech companies, couldn’t be neutral and had made up her thoughts earlier than becoming a member of the FTC that the corporate had violated the legislation.

“Though Khan has undoubtedly expressed views about Fb’s monopoly energy, these views don’t counsel the kind of ‘axe to grind’ primarily based on private animosity or monetary battle of curiosity that has disqualified prosecutors up to now,” Decide Boasberg wrote.

The fee filed the primary model of its lawsuit earlier than Ms. Khan joined the fee, and the decide mentioned there was no cause to assume her later vote to reinstate it “was primarily based on something aside from her perception within the validity of the allegations. Such habits doesn’t necessitate recusal.”

The decide, nevertheless, did facet with Fb on one other subject, ruling that the FTC couldn’t transfer ahead with allegations that the corporate used strong-arm ways to weaken opponents, resembling stopping third-party app builders from accessing Fb’s platform.

A Meta spokesman mentioned the ruling narrowed the scope of the FTC’s case. “We’re assured the proof will reveal the elemental weak spot of the claims,” the spokesman mentioned. “Our investments in Instagram and WhatsApp reworked them into what they’re at this time. They’ve been good for competitors, and good for the folks and companies that select to make use of our merchandise.”

Holly Vedova, director of the FTC’s bureau of competitors, mentioned the company’s workers “introduced a powerful amended grievance, and we stay up for trial.”

A timeline for the case stays unclear, but it surely may take years to litigate.

Write to Brent Kendall at brent.kendall@wsj.com

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Appeared within the January 12, 2022, print version as ‘FTC Case In opposition to Fb To Proceed.’

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