The FTC lawsuit was approved by the court, and Facebook may face an antitrust split

On January 12, 2022, a U.S. court in the District of Columbia dismissed a Facebook claim that the company asked a judge to drop an antitrust lawsuit filed by the U.S. Federal Trade Commission (FTC). This means that Facebook has failed to block the antitrust lawsuit, and the court will formally try the monopoly issue in the lawsuit.

The antitrust lawsuit dates back to January 2021. The FTC argues that Facebook has a monopoly in the social networking space, that its acquisitions and blocking of competitors have limited market competition, and that it should split up its acquisitions of Instagram and WhatsApp to punish them.

In terms of monopoly position, the FTC claims that data such as the number of monthly active users, the number of daily active users, and the average usage time all show that Facebook's market share in the social networking field exceeds 65%. Because social software naturally has network effects and high conversion costs, it is difficult for users to abandon their "friends" on Facebook and use other software instead. This also allowed Facebook to gain and maintain its monopoly position.

In 2012 and 2014, Facebook acquired Instagram and WhatsApp, respectively. The FTC believes it violates antitrust law and is suspected of forming or consolidating its monopoly position by acquiring competitors.

In addition, the FTC also believes that Facebook's practice of blocking competitors' API interfaces is suspected of monopoly. The blocking was implemented in 2013 and includes direct competitors Path App, Circle App with social features, and Vine, Twitter's short video app.

This move is similar to the behavior of domestic social software giant WeChat to block Douyin and Taobao. In February 2021, Douyin sued Tencent in a domestic court over the issue. Douyin believes that WeChat is a social media with a dominant market position and restricts access to competitors, so it is suspected of monopoly.

Under the pressure of public opinion, Facebook stopped blocking behavior in 2018. However, the evidence submitted by the FTC shows that the blocking behavior has far-reaching effects on other apps, and many companies have worried that competition with Facebook may lead to bans, and have expressed their intention to "surrender".

In response to Facebook's blocking behavior, the court ruled that it may violate antitrust law. But given that Facebook has long since stopped blocking and does not need to pass an injunction to ban its ended behavior, the court found that there is no need to determine its illegality.

The court held that Facebook's acquisition strategy and blocking strategy for competitors should be regarded as a complementary whole and considered together in subsequent antitrust trials.

The FTC's antitrust lawsuit against Facebook began on January 13, 2021, and the main issues alleged include Facebook abusing its monopoly position to fight competitors by using acquisitions and blocking APIs. In June 2021, the court ruled that the FTC's indictment contained insufficient factual statements and requested the FTC to supplement the relevant facts and evidence.

After the FTC amended the complaint at the court's request, Facebook applied to the court to dismiss the lawsuit. But the court approved of the FTC's supplementary complaint and ruled to dismiss Facebook's application, requiring it to submit a defense by Jan. 25.