The Federal Trade Commission’s lawsuit to dissolve Meta, formerly Facebook,
seemed to lack merit when it was brought in in the final weeks of the Trump presidency. But things look even worse when the case goes to legal discovery.
Although Meta’s acquisitions of Instagram (2012) and WhatsApp (2014) were approved, the FTC now claims the deals were anticompetitive and that the company retains an illegal monopoly in the “personal social networking services” market. But the FTC hasn’t clearly defined that market, leading Meta to file a legal motion this month to compel them to do so.
The agency says the market doesn’t include YouTube, Twitter,
Reddit and TikTok, although Meta competes with them for user time and ad revenue. Meta says it can’t defend itself against a monopoly charge if it doesn’t know what it’s defending against, and it’s right. The FTC seeks to manipulate a market, as it often does in antitrust lawsuits, without defining the boundaries of the market.
The FTC also refuses to produce eight documents from attorneys and economists related to its reviews of Meta’s Instagram and WhatsApp acquisitions over the past decade. These documents almost certainly contain facts and analysis about how the agency believed the deals would impact the competitive landscape at the time.
Meta argues the documents are vital to her defense and filed a motion this month to compel the FTC to turn them over. The FTC responded last week that the documents are protected by “advisory hearing” privilege and are “not necessary to illuminate the real issue in this case, which is Meta’s unlawful maintenance of monopoly power.”
Federal agencies sometimes invoke the privilege of the advisory process to protect records related to rulemaking from Freedom of Information Request Act (FOIA) disclosure. But there’s little precedent for an agency that could invoke that protective shield a decade after regulatory advice, let alone during a discovery in a court case it has filed.
If the documents are so sensitive, why did the FTC turn them over to the House Antitrust Subcommittee investigating tech companies in 2019? The committee’s majority report refers to the FTC’s voluntary submission of the documents, but Meta cannot see them.
Meta and the federal court overseeing the case are to trust the FTC’s ruling that the documents contain nothing of interest or relevance to the company’s defense. But why is the agency fighting so hard to protect the documents? Under the law, prosecutors may not withhold potentially exculpatory evidence from defendants.
The FTC essentially reversed its long-ago merger decisions that the company believed allowed it to invest and grow. The company and the public deserve to know what’s changed in substance in the agency’s analysis, or to wonder if that’s just a change because Facebook is now politically unpopular. Whatever Meta’s political sins, this is about the rule of law.
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https://www.wsj.com/articles/the-ftc-facebook-secrecy-monopoly-documents-instagram-whatsapp-merger-acquisition-11658682978 The FTC’s Facebook Secrecy – WSJ