CEI Experts: Courts Should Dismiss Antitrust Lawsuits against Facebook

Facebook today asked courts to dismiss antitrust lawsuits brought by the Federal Trade Commission and state attorneys general, an outcome supported by the Competitive Enterprise Institute for legal and consumer freedom reasons.

Statement by Kent Lassman, CEI President:

“When neither the facts nor the law are on your side, the only thing left is political muscle. The lawsuits by the FTC and state attorneys general are dangerous political posturing, unrooted in economics or law. They fail on economics because there is no demonstrated consumer harm. They fail on the law because the acquisitions were previously approved and remedies are only available for ongoing, not previous, conduct. Crucially, they fail the test of common sense. Consumers continue to benefit from investment, innovation, and new entrants into the marketplace. Americans have had enough of power poses and posturing. Dismissal of these cases would help renew confidence in free enterprise and the rule of law.”

Statement by Jessica Melugin, Director of CEI’s Center for Technology & Innovation:

“The only question worth asking about Facebook’s acquisitions of Instagram and WhatsApp is: how did consumers fare? U.S antitrust law is based on consumer harm, and there’s none of that to be found in the lawsuits brought by Federal Trade Commission or state attorneys general against the social media giant. Facebook made WhatsApp free and improved the Instagram app to the tune of a billion satisfied users. No prices have been raised, no output has been restricted, and no consumer has been harmed by these acquisitions. Both lawsuits should be dismissed.”

Statement by Ryan Young, CEI Senior Fellow:

“The Facebook case is a classic example of the relevant market fallacy. The FTC made up its own boutique term for Facebook’s market, ‘personal social networking services,’ which excludes Twitter, TikTok, and other competitors, as well as emerging competitors like Discord and Clubhouse. Of course Facebook dominates a market definition that intentionally leaves out most of the competition! But any of them could take away Facebook’s market share, like Facebook did with MySpace.”

Related analysis:

Commentary: Antitrust Litigation Usually Causes More Harm Than Good. Big Tech Is No Different

Statements: State AG and FTC Antitrust Actions against Facebook Fail to Prove Consumer Harm or Anticompetitive Behavior

Report: U.S. Antitrust’s Greatest Misses

The Case For Repealing Antitrust Law by Fred L. Smith, Jr. (1999)