Facebook Says U.S. Monopoly Case Tainted by FTC Chair’s Vote

(Bloomberg) -- Facebook Inc. asked a federal court to throw out the U.S. government’s revised monopoly lawsuit against the company, arguing the chair of the Federal Trade Commission should have recused herself from the decision to bring the case.

In a court filing Monday in Washington, Facebook said FTC Chair Lina Khan is biased against the social-media giant and should have been disqualified from casting a decisive vote by the commissioners to file the landmark lawsuit, which seeks to break up the company.

“The chair’s participation in the proceeding violates both basic due process safeguards and federal ethics rules,” Facebook said in the filing.

The government claims the company abused its monopoly power in the social media market. The FTC says Facebook engaged in an anticompetitive strategy of buying companies, including Instagram and WhatsApp, to neutralize them as potential competitors. The agency initially approved both deals but now says they should be unwound.

The FTC refiled its complaint in August after a federal judge dismissed the original lawsuit for failing to provide sufficient details to support the claim that Facebook has monopoly power. 

Facebook had argued in a petition in July that Khan should be recused given her past criticisms of the company before becoming the chair and her work on a House committee that investigated Facebook and other large tech companies over alleged antitrust abuses.

The FTC commissioners voted 3-2 to file the revised complaint, with Khan joining her two fellow Democratic commissioners. The agency dismissed Facebook’s recusal petition, arguing that the company’s due process rights would be protected because a federal judge will decide the case. If Khan had been recused, the commission would have deadlocked 2-2 and couldn’t have refiled the complaint.

In addition to targeting Khan’s participation, Facebook said the FTC’s claim of monopoly power is based on a contrived market the agency calls personal social networking services, a market that includes Snapchat but not TikTok. Facebook also says the FTC is relying on misleading data about user metrics that overstate Facebook’s share of the market. 

“The case is entirely without legal or factual support,” Facebook said. “This is as true now as it was before. The case was refiled, on a 3-2 vote, by an agency that seeks unapologetically to expand antitrust law beyond its settled and appropriate bounds.”

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