Skip to main content

Busy Week for the FTC Shows Aspirations of and Limitations on Chair Khan’s Enforcement Agenda

Last week was momentous for the Federal Trade Commission.  First, the campaign use antitrust to reign in “Big Tech” faced a setback as the United States District Court for District of Columbia dismissed the FTC’s suit against Facebook (as well as a similar suit brought by virtually all the State Attorney Generals).  In juxtaposition, on July 1, 2021, the FTC held an unusual open meeting of the Commission.  Clearly indicating that she intends to utilize her 3-2 Democratic majority while she has it1, Chair Lina Khan passed several agenda items foreshadowing broad, aggressive antitrust enforcement activity by the FTC.

Coupled with the antitrust reform activity currently occurring in Congress, it is already clear that business in most industries must keep a careful eye on the antitrust arena, ensure that their antitrust compliance activities are up-to-date, and reevaluate their business activities and those of their competitors.

In this Note, we do a “deep dive” into the Facebook opinion and highlight those areas of the July 1st FTC meeting that are of particular importance.  We would be happy to discuss any of this and its implications with our clients and friends.

First, we start with the Facebook decisions, which show the state and limitations of current monopolization law under Section 2 of the Sherman Act.  The decision also shows that the courts will not let the FTC charge Facebook and the similar tech giants as possessing market power, without actually carefully defining the market in which they possess such power and proving that the power exists.

In two companion decisions issued on June 28, 2021, the Honorable James Boasberg of the District Court for the District of Columbia granted Facebook, Inc’s (“Facebook”) motions to dismiss complaints brought by both the FTC and a number of states. The FTC Complaint was filed near the end of the Trump Administration.  Both complaints alleged very similar anti-competitive conduct by Facebook, but the reasoning for granting the motions to dismiss differed.  Facebook’s motion to dismiss the States’ complaint was granted in its entirety, while its motion to dismiss the FTC’s complaint was granted, with the FTC given thirty days to amend the complaint. 

The decisions were moderate in tone, carefully written and legally well supported.  The decision on whether to refile the complaint in district court, or use the FTC’s administrative litigation process, will be the first big decision for Biden’s new FTC Chair Lina Khan.  The original complaint, while deficient in some regards, was well within the bounds of traditional antitrust theory.  If Chair Khan wishes to implement her aggressive enforcement agenda, this case presents an opportunity to refile the complaint with additional theories of harm or causes of action.

Federal Trade Commission v. Facebook, Inc., Civil Action No. 20-3590 (JEB)

Market definition often lies at the heart of an antitrust case.  In the FTC’s Complaint, the FTC alleged that Facebook maintained a monopoly in the “Personal Social Networking Services” market in violation of Section 2 of the Sherman Act by (1) acquiring firms it felt threatened its monopoly, such as Instagram and WhatsApp; and (2) adopting policies preventing interoperability between Facebook and certain other apps that it saw as threats.  The FTC sought equitable relief, including forced divestiture or reconstruction of businesses as well as orders not to undertake similar conduct in the future.  While the Court accepted the FTC’s allegation  of Personal Social Networking Services (“PSN Services”) as the relevant market, it found that the agency had failed to plead enough facts to plausibly establish that Facebook had a market share “in excess of 60%” in that market, finding “the FTC’s inability to offer any indication of the metric(s) or method(s) it sued to calculate Facebook’s market share renders its vague ‘60% plus’ assertion too speculative and conclusory to go forward.”  Federal Trade Commission v. Facebook, Inc., Memorandum Opinion, Dkt. No. 73 (June 28, 2021) (“FTC Opinion”) at 2. A Section 2 violation requires “(1) the possession of monopoly power in the relevant market and (2) the willful maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.”  FTC Opinion at 17 (citing United States v. Microsoft Corp., 253 F.3d 34, 50 (D.C. Cir. 2011) (en banc)).  The Court’s decision ultimately turned on its finding that the first element – the possession of monopoly power in the relevant market – was not adequately pled.

Where there is not direct evidence of market power, market power may be inferred from “a firm’s possession of a dominant share of a relevant market” paired with a showing that there are “barriers to entry” into that market.  FTC Opinion at 18 (citing Toys ‘R’ Us Inc. v. FTC, 221 F.3d 928, 937 (7th Cir. 2000) and Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114, 1123-25 (10th Cir. 2014)).  The FTC argued that the relevant market includes PSN services, such as Facebook Blue, Instagram, and Path, and that other types of internet services, such as professional networking services, interest based apps, video and audio-based apps, and mobile messaging are not “adequate substitutes” for PSN services.  FTC Opinion at 22-23.  The Court conceded “there are certainly bones that one could pick with the FTC’s market-definition allegations,” but found them sufficient to survive the pleadings stage.  FTC Opinion at 23.

Where the Court, faulted the FTC was for its failure to specify what it was measuring in alleging that Facebook held a market share “in excess of 60%.”  FTC Opinion at 28-29.  Unlike other commodities, where it can be inferred that market share refers to a percentage of revenues, the nature of Facebook’s model, where all revenue is generated from ads, makes it impossible to use the standard metrics to establish market share.  FTC Opinion at 29.  The Court considered a number of potential different metrics, such as the total time spent by users on PSN services or the percentage of daily or monthly users, finding that each was potentially problematic and, more importantly, it could not be reasonably inferred from the FTC’s Complaint that that was the metric being used.  FTC Opinion at 29-30.  The Court also noted the oddity that the Complaint alleges throughout that Facebook’s market share is “somewhere north of 60%,” but yet never specifies who the other market participants are.  FTC Opinion at 30-31.  The Court summarized the Complaint’s deficiency:  “To merely allege that a defendant firm has somewhere over 60% share of an unusual, nonintuitive product market – the confines of which are only somewhat fleshed out and the players within which remain almost entirely unspecified – is not enough.”  FTC Opinion at 32.

While the Court could have stopped there, it took the somewhat unusual step of “explain[ing] two further conclusions of law,” “to guide the parties in the event amendment [of the Complaint] occurs.”  FTC Opinion at 2.  While dicta, this portion of the decision was insightful.  First, the Court indicated that it would not base injunctive relief on the grounds that Facebook maintains a policy of refusing interoperability permissions with competing apps, finding that injunctive relief would not be appropriate when the alleged conduct occurred “long-past conduct” occurring seven years prior.  FTC Opinion at 3.  Second, the Court found that the FTC could pursue injunctive relief regarding the acquisition of Instagram and WhatsApp.  FTC Opinion at 3. 

The FTC had pointed to a lapsed Facebook policy of refusing to allow third-party, freestanding apps to access APIs if they “replicate[d] [Facebook’s] core functionality” as purportedly unlawful “conditional dealing” or unlawful “refusals to deal” with apps that had their API access revoked or blocked.  FTC Opinion at 33.  The Court found that neither theory offered a viable basis for an injunction under Section 13(b) of the FTC Act.  FTC Opinion at 33.  First, applying Aspen Skiing and Trinko, the Court reiterated that a general policy of refusing to provide API access to competitors is not, standing alone, a violation of Section 2.  FTC Opinion at 39.  Particularly relevant was the fact that Facebook had no history of prior dealing with the rivals it excluded, which now defines the limitation to an Aspen Skiing claim.  FTC Opinion at 40.  To be actionable, a refusal to deal must involve a policy that “was enforced (i) against a rival with which the monopolist had a previous course of dealing; (ii) while the monopolist kept dealing with others in the market; and (iii) at a short-term profit loss, with no conceivable rationale other than driving a competitor out of business in the long run.”  FTC Opinion at 41.  The FTC had made no such allegations.

Second, even if the specific instances in which Facebook revoked API permissions did constitute Section 2 violations, the Complaint did not allege any such conduct since 2013.  FTC Opinion at 41.  As such, even accepting the Complaint’s allegations as true, there is no risk that Facebook “is violating” or “is about to violate” the antitrust laws as required for an injunction under Section 13(b).  Finally, the FTC failed to plead facts to support a “conditional dealing” theory.  FTC Opinion at 33, 43.

Next, the Court considered the FTC’s allegations that Facebook’s conditioning of access to its platform was unlawful under Lorain Journal as exclusive-dealing, and found that, even if such conduct could be actionable, the FTC had failed to sufficiently plead such conduct.  FTC Opinion at 48-49.  The Court concluded that “Facebook’s imposition and enforcement of anticompetitive conditions on access to [its] APIs, as that conduct has been pleaded, either does not amount to exclusionary conduct violating Section 2 of the Sherman Act or, to the extent that it might, cannot be the basis for an injunction under Section 13(b) of the FTC Act.”  FTC Opinion at 50. 

Finally, the Court, in its own words, “offers the agency some consolation” through its conclusion that the FTC may bring a challenge to the acquisition of Instagram and WhatsApp in 2012 and 2014, respectively.  FTC Opinion at 32, 51.  Section 7 of the Clayton Act allows challenges to acquisitions not only as “a discrete transaction but [rather] a status which continues until the transaction is undone.”  FTC Opinion at 51 (citing United States v. ITT Cont’l Baking Co., 420 U.S. 223, 241-42 (1975)).  The Court applied that same reasoning to challenges under Section 2 of the Sherman Act to conclude that “an injunction under Section 13(b) is a theoretically available remedy in a Section 2 challenge to long-ago mergers so long as the defendant still holds the purchased assets or stock, as is the case here.”  FTC Opinion at 52-53.

The Complaint was dismissed without prejudice, and the FTC granted 30 days to file an amended complaint.  Should the FTC choose to do so, its amended complaint will be due on July 29, 2021.  Order, Dkt. No. 72 (June 28, 2021). 

State of New York, et al. v. Facebook, Inc., Civil Action No. 1:20-cv-03589 (JEB)

The States’ case faired even more poorly as the Court treated them not as a government enforcer of the antitrust laws, but as no different than a private plaintiff.  As a consequence, the Court applied the doctrine of laches, which it did not think applicable to the FTC, to dismiss the States’ case.  In addition to bringing similar allegations that the acquisition of competitor firms and adoption of policies preventing interoperability constituted Section 2 violations, 46 States, the District of Columbia, and the Territory of Guam (collectively, the “States”) further alleged that Facebook’s purchases of Instagram and WhatsApp violated Section 7 of the Clayton Act.  States Opinion at 1.  Like the FTC, the States sought equitable remedies including divestitures or reconstruction of acquired business lines.  The Court granted Facebook’s motion to dismiss the States’ Complaint entirely, without leave to amend.  State of New York, et al. v. Facebook, Inc., Memorandum Opinion, Dkt. No. 137 (June 28, 2021) (“States’ Opinion”). 

First, the Court found that laches precluded the relief sought to the extent the States challenged the acquisition of Instagram in 2012 and WhatsApp in 2014, as the Court could not identify any case in which antitrust conduct was challenged after such a delay by any plaintiff other than the federal government.  “If laches is to mean anything, must apply on these facts, even in a suit brought by states,” the Court reasoned.  States’ Opinion at 2.  Further, as the Court similarly found with respect to the FTC Complaint, Facebook’s policy of preventing interoperability with competing apps necessarily failed to state a claim.  States’ Opinion at 2.  The Court again allowed that the implementation of the policy may, in some instances, constitute an antitrust violation, however, since all such instances occurred over five years prior to the States’ Complaint, they could not constitute the basis for the injunctive relief sought by the States.  States’ Opinion at 2. 

The Court then found that the injunctive relief sought in the Complaint was not available for the violations alleged.  To the extent the States did allege specific refusals to deal, those instances all occurred from 2013 to 2015, a five-year delay the Court deemed “fatal to [the States’] claim for equitable relief under Section 16 of the Clayton Act.”  States’ Opinion at 31.  Section 16 of the Clayton Act allows injunctive relief “against threatened loss or damages,” which has been interpreted as applying to “attempt to foreclose a future harmful act” (“preventative” injunctions) or to “prevent the future harmful effects of past acts” (“reparative” injunctions).  States’ Opinion at 31 (citing Lampkin v. Dist. of Columbia, 886 F. Supp. 56, 62 (D.D.C. 1995)).  The allegations of Facebook’s revoking rivals’ API access is not ongoing or contemporary, since the States’ Complaint alleges that the last revocation occurred in 2015 and the policies themselves were suspended in 2018.  States’ Opinion at 32.  A “preventative” injunction is not available where Plaintiffs allege no “more than a mere possibility … that the injury will occur” again.  States’ Opinion at 33.  Further, the Court reasoned, a reparative injunction is not available as, even accepting the allegations that Facebook’s revocation of API access to competitor apps in 2013-2015 blunted the growth of existing competitors and deterred other potential competitors, “there is nothing the Court could order Facebook to do that would remedy that specific injury.”  States’ Opinion at 33 (emphasis in the original).  The Court reiterated that “as a general rule, past wrongs are not enough for the grant of an injunction” and suggested that the usual remedy in such cases is damages, which the States did not seek (and would be time-barred, anyway).  States’ Opinion at 34 (citing Qualcomm, 969 F.3d at 1005). 

Unlike the FTC, the States were not granted leave to replead, and the case was dismissed in its entirety, albeit without prejudice.  Order, Dkt. No. 136 (June 28, 2021). 


Several days after the Facebook decision, the FTC held its first open meeting in decades and its first meeting under Chair Khan.  Chair Khan indicated that the Commission as part of a transparency initiative intended to have such meetings monthly.  Chair Khan was firmly in control of the agenda of the outcomes.  There was no apparent attempt at being bi-partisan or reaching a consensus.  All agenda items passed by a “party line” 3-2 vote, and a set of “clarifying amendments” offered by the Republican Commissioners were uniformly rejected by the same 3-2 vote.

Among the agenda items, there are two worth focusing upon for antitrust purposes.

First, the Commission withdrew its short 2015 Antitrust Policy Statement.  The crux of that statement was that, despite precedent that held that Section 5 of the FTC Act was broader than the reach of the Sherman Act, the FTC would utilize Section 5 consistent with the limits of the antitrust statutes and ground its enforcement activities upon the principles of “consumer welfare”.

In withdrawing the Statement, Chair Khan, joined by the other two Democratic Commissioners, issued a statement calling the 2015 Statement “shortsighted”:  “[i]n practice, the Statement has doubled down on the Commission’s longstanding failure to investigate and pursue ‘unfair methods of competition.’”  The Press Release continued:

Rescinding the statement, they concluded, is crucial to bringing the FTC back in line with its statutory obligations.

The Commission’s inability, after a century of commanding this statutory authority, to deliver clear Section 5 principles suggests that the time is right for the Commission to rethink its approach and to recommit to its mandate to police unfair methods of competition, even if they are outside the ambit of the Sherman or Clayton Acts.  The task will require careful and serious work, but it is one that our enabling statute expected and required. 

The majority statement also noted that the Commission will exercise this authority consistent with congressional directives and appropriate case law.  In addition, the Commission may consider additional guidance, policy statements, and rules describing conduct that may violate the prohibition on unfair methods of competition.

Press Release, FTC Rescinds 2015 Policy that Limited Its Enforcement Ability Under the FTC Act (July 1, 2021), available at

Second, the Commission voted a series of investigatory resolutions with a ten year duration that directs the Staff to conduct investigations using subpoenas and other compulsory processes.  Priority targets include repeat offenders; technology companies and digital platforms; and healthcare businesses such as pharmaceutical companies, pharmacy benefits managers, and hospitals.

As Chair Khan explained in an accompanying statement: 

Several of these industries are highly concentrated and there is widespread concern about unfair methods of competition or unfair or deceptive practices. One resolution authorizes investigations relating to business practices that target workers and operators of small businesses, while another proposal allows staff to use compulsory process to investigate potential infractions of FTC-administered statutes as they relate to COVID-19.  These targeted resolutions would streamline investigations that fall within these subject areas, enabling more expeditious investigatory process.  This is particularly important given that we are in the midst of a massive merger boom.  The proposed resolution package also includes a general resolution authorizing the use of compulsory process when investigating mergers.  In the past several years, the Commission has regularly – and unanimously – voted on such merger resolutions, but extra bureaucratic hurdles slow down and hobble investigations unnecessarily.  Our reform package would streamline this so that we can be more nimble and comprehensive.

Remarks of Chair Lina M. Kahn on the Investigatory Resolutions (July 1, 2021), available at


To quote Sherlock Holmes, “the game’s afoot”:

  1. We can expect additional initiatives from Chair Khan, likely quickly, before she loses—for a period of time—her crucial third vote.  We anticipate that the Staff can be expected to flex its new investigatory muscle promptly, and that we will see in the fall an increase of priority investigations.
  2. With respect to the Facebook complaint, we would assume that the FTC will file an amended complaint by the deadline.  The district court provided a pretty clear roadmap as what the FTC must allege to survive a motion to dismiss, and they are likely to do so.  It will be interesting to see whether Chair Khan and the Staff will use the opportunity to broaden the case against Facebook.  30 days is not a lengthy time to come to an internal consensus and draft a new complaint, so it is possible that the FTC will seek more time.
  3. With respect to the States -- they filed a new case this week against Google’s control and administration of its phone’s app stores, clearly signaling that they do not intend to pull back in any way.  With respect to Facebook, their options are limited.  Their best move might be to join whatever amended complaint the FTC files. They could also appeal the dismissal of their case, but that would hang them up in the DC Circuit for a year or more arguing over laches.
  4. Unless antitrust reform legislation passes, this stepped-up enforcement might, under current law, receive a hostile reception by the courts.  However, it is undeniably a new day for antitrust activity across the economy, and as we said at the outset, entities across the economies should be aware of this sea change and should ensure that they do not become the focus or target for this heightened and broader enforcement.

1 Commissioner Chopta is awaiting confirmation to head the Consumer Finance Protection Board.  Once he leaves the Commission, FTC Chair Khan will have to manage a split 2-2 Commission, likely for a period of several months.

Subscribe To Viewpoints


Bruce D. Sokler

Member / Co-chair, Antitrust Practice

Bruce D. Sokler is a Mintz antitrust attorney. His antitrust experience includes litigation, class actions, government merger reviews and investigations, and cartel-related issues. Bruce focuses on the health care, communications, and retail industries, from start-ups to Fortune 100 companies.

Joseph M. Miller

Member / Co-chair, Antitrust Practice

Joseph M. Miller is Co-chair of Mintz’s Antitrust Practice. He draws on in-house, law firm, and government experience to advise clients on transactions, government investigations, and merger reviews.
Lexie G. Gallo-Cook is a litigator at Mintz who focuses on antitrust and trade matters and cross-jurisdictional disputes. Lexie works closely with clients to develop litigation strategies. She has litigated in state and federal trial and appellate courts throughout the United States, as well as the International Trade Commission.