State AGs Fight Dismissal of Facebook Antitrust Case

A Facebook logo is displayed on a smartphone in this illustration taken Jan. 6, 2020. Dado Ruvic/Illustration/Reuters

A coalition of state attorneys general, led by New York’s Letitia James, appealed the dismissal of their antitrust lawsuit against Facebook.

In a notice filed on July 28 in a federal court in the District of Columbia, attorneys general from 48 states and territories said they would appeal a June decision that dismissed their lawsuit against Facebook, which challenged the social media giant’s 2012 purchase of Instagram and its 2014 acquisition of WhatsApp.

U.S. District Judge James Boasberg in Washington, an Obama appointee, wrote in a June 28 opinion (pdf) that the states waited too long to file their lawsuit, which sought to break up what the attorneys general described as Facebook’s monopoly on social networking.

James said in a statement that the state attorneys general would continue their battle against the social media company.

“We filed this notice of appeal because we disagree with the court’s decision and must hold Facebook accountable for stifling competition, reducing innovation, and cutting privacy protections,” she said. “We can no longer allow Facebook to profit off of exploiting consumer data.”

New York State Attorney General Letitia James takes a question at a news conference in New York on Aug. 6, 2020. Kathy Willens/AP Photo

A Facebook spokesperson hailed the June decision dismissing the complaint, telling Reuters that the company looks forward to defending the District Court’s decision before the appeals court.

Separately, Boasberg dismissed an antitrust lawsuit from the Federal Trade Commission (FTC) that echoed arguments made in the suit by the attorneys general and that further alleged that Facebook violated antitrust laws by purchasing a would-be competitor. Boasberg wrote in an opinion (pdf) that the FTC lawyers didn’t provide enough evidence or explanation on how they determined that Facebook controls more than 60 percent of the social media networking market.

“The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims—namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services,” Boasberg wrote. “The complaint contains nothing on that score save the naked allegation that the company has had and still has a ‘dominant share of [that] market (in excess of 60 percent).’”

Following the decision, the FTC requested an extension to file an amended complaint, which was granted, giving the agency until Aug. 19 to take action.

The ruling comes as the House is considering legislation that would give agencies more authority to pursue antitrust enforcement against dominant tech companies.

Curbing Big Tech’s enormous power is a rare issue that has strong support from both Democrats and Republicans, according to Rep. Ken Buck (R-Colo.).

“It’s a fascinating issue because Democrats don’t like these Big Tech companies for one set of reasons and Republicans don’t like them for another set of reasons, but we’re unified in not liking them—and anytime that happens, you can pass legislation,” Buck, the ranking member of the House Judiciary Subcommittee of Antitrust, Commercial, and Administrative Law, told The Epoch Times’ “American Thought Leaders” earlier this month.

Buck and Subcommittee Chairman David Cicilline (D-R.I.) announced a bipartisan agenda in June that seeks to hold big tech companies “accountable for anti-competitive conduct.”

Five pieces of legislation unveiled by a group led by the pair include bills that would bar conduct by the companies that is deemed discriminatory, prohibit the acquisition of competitive threats, and promote competition by making it easier for businesses to enter the digital space.

Cicilline argued at the time that the “unregulated tech monopolies have too much power over our economy.”

“They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us,” he said in a statement.

Big tech companies, including Facebook, Google, and Amazon, have repeatedly rejected claims that they are abusing their market position and have disputed many of the claims about the power that they hold.

Zachary Stieber contributed to this report.