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FTC takes on Facebook in amended antitrust complaint

The social network faces accusations it engaged in illegal anticompetitive behavior.

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The FTC's antitrust battle with Facebook is far from over. 

James Martin/CNET

The Federal Trade Commission on Thursday filed an amended antitrust complaint against Facebook, accusing the social media giant of unlawfully maintaining its dominance by acquiring or eliminating companies its sees as competitive threats. 

The FTC's new 80-page complaint alleges that Facebook illegally crushed its rivals through tactics such as buying up competitors and restricting developers from accessing the social network's data. That has harmed consumers, the lawsuit alleges, because they have fewer choices in social networking, allowing Facebook to benefit from gathering personal data from users.

"Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat," said Holly Vedova, acting director of the FTC's bureau of competition, in a statement.

In June, US District Judge James Boasberg dismissed an earlier antitrust complaint filed by the FTC, saying the agency hadn't provided enough evidence that Facebook has monopoly power in personal social networking. What constitutes a social network is "hardly crystal clear," the judge said, noting that Facebook's services are free to consumers.

The FTC included more data and evidence to support its allegations that Facebook is a monopolist that abused its market power to harm its rivals. The agency cites data from Comscore that shows the number of monthly active users Facebook and Instagram have in the US and the amount of time they spend on the app daily. Disappearing-message app Snapchat, the FTC said, is the next-largest social network and has tens of millions fewer monthly active users than Facebook and Instagram.

Personal social networking services, the FTC said, "enable and are used by people to maintain personal relationships and share experiences with friends, family, and other personal connections in a shared social space." Video app TikTok, the agency said in the complaint, isn't part of this market because users share content to people they don't personally know. The FTC makes the case that Twitter, Reddit, Pinterest, YouTube, Spotify, Netflix and Hulu are different from personal social networks. 

Facebook has also faced several privacy scandals that have significantly dissatisfied its users but still hasn't a lost a large amount of those users or engagement to its competitors. "This is an indicator of market power," the FTC said in the complaint. 

A Facebook spokesman called the FTC's lawsuit "meritless" and noted that the agency cleared the acquisitions of Instagram and WhatsApp years ago. "There was no valid claim that Facebook was a monopolist -- and that has not changed," he said in a statement. "The FTC'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."

The amended complaint comes amid growing concerns that Big Tech companies have grown so large that they constitute unregulated monopolies. In June, lawmakers unveiled a package of five bipartisan bills that target Amazon, Apple, Facebook and Google. The bills would represent the most meaningful refashioning of antitrust laws in decades if passed into law.

Boasberg also dismissed a similar case against Facebook filed by 48 attorneys general. In a separate opinion, he said the states waited years to legally challenge Facebook's acquisitions of photo service Instagram and messaging app WhatsApp. The acquisitions happened in 2012 and 2014, respectively.

The FTC had 30 days to file an amended complaint, a deadline that was extended to Aug. 19. 

In July, Facebook also filed a petition to get FTC Chair Lina Khan recused from the agency's lawsuits, arguing that Khan has already made up her mind about the company's antitrust liability.