The FTC’s Facebook Suit: Questions and Answers

By: FTC Staff

1. What have you sued Facebook for and why?

We have sued Facebook for illegal monopolization. Section 2 of the Sherman Act, which the FTC enforces through Section 5 of the FTC Act, prohibits companies from using anticompetitive means to acquire or maintain monopoly power. The FTC’s complaint alleges that Facebook has for many years been unlawfully stifling competition and strengthening its monopoly. Facebook’s unlawful practices include acquisitions of two major competitive threats—Instagram and WhatsApp—and practices relating to API access that deter and hinder competition, and contribute to the maintenance of Facebook’s personal social networking monopoly.

2. What relief are you seeking?

We have asked the court to provide whatever relief is necessary to restore competition. That could include divestiture of Instagram and WhatsApp, as well as injunctive relief preventing Facebook from pursuing anticompetitive practices like the use of anticompetitive conditions on API access. The court has broad remedial powers, and as litigation proceeds we will develop our understanding of what an appropriate remedial package would look like.

3. What comes next?

Facebook must now either answer our complaint or move to dismiss it.

4. Doesn’t Facebook compete with many other online companies? Isn’t competition just a click away?

No. Our lengthy investigation revealed—and the Complaint alleges—that there is a distinct market for personal social networking: that is, online services that 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. Facebook holds monopoly power in that personal social networking market.  Other online services are not reasonably substitutable for personal social networking services…

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