560 F.Supp.3d 1
D.D.C.2021Background
- FTC sued Facebook (Dec. 2020) under Section 2 of the Sherman Act via Section 13(b) of the FTC Act, alleging monopoly maintenance in the U.S. market for "Personal Social Networking (PSN) Services." Judge Boasberg issued the decision on June 28, 2021.
- Core factual allegations: Facebook acquired Instagram (2012) and WhatsApp (2014) to neutralize nascent rivals; it also imposed and enforced Platform/API policies that limited interoperability with third‑party apps, allegedly blunting rivals' growth.
- FTC defined PSN services by three features (social graph, broadcast-style sharing, connection-finder) and alleged Facebook maintained a dominant share "in excess of 60%," but did not state what metric or method produced that figure.
- Court held the Complaint fails to plausibly allege monopoly power because the market-share allegation is conclusory and the FTC did not plead the metric(s) or sufficient detail on market players and consumer substitution.
- The Court further held: (1) Facebook's general policy refusing interoperability is not per se unlawful; and (2) even if some specific API revocations could be actionable, the last alleged revocations occurred in 2013, so Section 13(b) injunctive relief (which requires ongoing or imminent violations) is unavailable for the Platform claims.
- The Court concluded Section 13(b) can, however, in principle support equitable relief challenging long‑past acquisitions so long as the defendant still holds the acquired assets; the FTC was granted leave to amend within 30 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FTC plausibly alleged Facebook has monopoly power in U.S. PSN market | FTC: PSN is a distinct market (social graph, broadcast sharing, connection-finder); Facebook holds >60% share and entry barriers protect that power | Facebook: Market definition is implausible/tenuous and FTC fails to plead market share metric or identify other competitors | Dismissed for failure to plead monopoly power; market-share allegation conclusory and metric unspecified; leave to amend granted |
| Whether Facebook's Platform/API policies constitute unlawful refusal to deal (Aspen Skiing theory) | FTC: Facebook conditioned API access to deter/foreclose rivals and revoked access to promising apps, harming competition | Facebook: No antitrust duty to deal; general refusals lawful; only narrow Aspen Skiing exception applies where monopolist sacrificed short-term profits to exclude rivals | Court: General policy lawful; specific revocations might be actionable but last occurred in 2013; cannot support Section 13(b) injunctive relief now |
| Whether Facebook's conditional‑dealing / exclusive‑dealing theory (Lorain Journal / tying/exclusive dealing) fits FTC allegations | FTC: Facebook conditioned access to Platform on not competing, interfering with rivals' access to developers and users | Facebook: Policies did not impose blanket exclusivity or prevent rivals from reaching developers/users; FTC pleadings lack specific instances of conditioning that impaired rivals | Held: FTC failed to plead necessary facts showing Lorain-style exclusive dealing; conditional-dealing theory not supported by alleged policies |
| Whether Section 13(b) permits injunctive relief challenging past acquisitions (Instagram, WhatsApp) | FTC: Injunctions and divestiture are appropriate because Facebook continues to hold acquired assets and acquisitions have ongoing anticompetitive effect | Facebook: Mergers long ago cannot support "is violating" or "is about to violate" standard for Section 13(b) | Held: Section 13(b) can in principle be used to challenge long-ago acquisitions while assets are still held; such claims are not categorically barred under Section 13(b) |
Key Cases Cited
- United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir.) (monopoly power and exclusionary conduct analysis)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) (narrow refusal-to-deal exception where monopolist sacrifices short-term benefits to exclude rival)
- Verizon Commc'ns Inc. v. Trinko, 540 U.S. 398 (2004) (no general duty to deal; limits on Aspen Skiing)
- FTC v. Shire ViroPharma, Inc., 917 F.3d 147 (3d Cir.) (Section 13(b) does not reach long‑past conduct absent risk of recurrence)
- AMG Capital Mgmt., LLC v. FTC, 141 S. Ct. 1341 (2021) (Section 13(b) forward‑looking nature of injunctive relief)
- United States v. ITT Cont'l Baking Co., 420 U.S. 223 (1975) (an "acquisition" can be a continuing status; relief may address holding of assets)
- United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586 (1957) (government may seek divestiture long after original acquisition)
- United States v. Dentsply Int'l, Inc., 399 F.3d 181 (3d Cir.) (exclusive dealing can preserve monopoly)
- Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (10th Cir.) (limits on refusal-to-deal claims and necessity of preexisting course of dealing)