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Facebook files to dismiss FTC lawsuit again, says Khan should have recused

Facebook Chief Executive Officer and founder, Mark Zuckerberg, leaving the Merrion Hotel in Dublin after meeting with Irish politicians to discuss regulation of social media, transparrency in political advertising and the safety of young people and vulnerable adults. On Tuesday, April 2, 2019, in Dublin, Ireland.

Artur Widak | NurPhoto | Getty Images

Facebook on Monday filed its second motion to dismiss the Federal Trade Commission’s lawsuit accusing it of illegal monopolization, claiming the agency’s vote to file an amended complaint was not valid since Chair Lina Khan should have recused herself.

The FTC had filed an amended complaint after a federal judge threw out the agency’s initial claims. The judge, however, gave the FTC a second chance to back up its claims that Facebook violated antitrust law by illegally maintaining monopoly power.

Before the FTC filed that amended complaint, however, Facebook had submitted a petition for recusal against Khan, claiming her past statements showed she had already made up her mind on its liability.

The FTC said it dismissed the petition after its Office of General Counsel “carefully reviewed” it, according to a press release accompanying the amended complaint. The office decided that since the case would be argued before a federal judge, “the appropriate constitutional due process protections will be provided to the company.”

Facebook is now posing that question to the court, writing in its complaint that Khan’s participation in the House Judiciary subcommittee on antitrust report about competition digital markets “at the very least creates the appearance that the Chair has prejudged the facts and cannot be unbiased or impartial.”

That report found that Facebook holds monopoly, along with Amazon, Apple and Google. Khan was responsible for the Google section of the report.

Facebook claimed in its motion to dismiss that Khan’s participation in the 3-2 vote to bring the amended complaint “violates both basic due process safeguards and federal ethics rules.”

Khan said in her confirmation hearing before the Senate that she did not believe she had financial conflicts that would require her recusal under ethics laws. And antitrust experts say courts tend to see the question of recusal as less pressing when a commissioner is voting to bring a case in federal court, rather than acting as a judge under the agency’s internal administrative law proceedings.

Besides the question of recusal, Facebook said in its filing that the FTC still failed to plausibly support its claims that the company holds monopoly power in what the agency defined as the personal social networking services market. Facebook claims the FTC “cherry-picked” data from three apps, Facebook, Instagram and Snapchat, to “support its new, supercharged market-share numbers” and that it still failed to show that its acquisitions of Instagram and WhatsApp constituted exclusionary conduct.

The company’s stock was down more than 5% on Monday, though several of its peers were also down about 3%. On the same day, several Facebook services experienced technical outages. On Sunday, a Facebook whistleblower revealed her identity in a TV interview ahead of her appearance before a Senate panel.

A spokesperson for the FTC declined to comment.

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