Yahoo Finance's Dan Howley unpacks the FTC's new antitrust complaint against Facebook.
Video Transcript
AKIKO FUJITA: Welcome back to "Yahoo Finance Live." Investors right now shrugging off the latest regulatory pressure facing Facebook right now. The FTC earlier today filing a new antitrust complaint after a federal judge dismissed the previous complaint it filed against the company.
Let's bring in Yahoo Finance's Dan Howley, who is tracking the very latest for us. Dan, what's the difference here when you look at the latest complaint? Obviously, the FTC had the original complaint kicked out. They've had some time to reassess. What are you finding in this filing?
DAN HOWLEY: Yeah. This isn't a new complaint. It's an amended version of the prior complaint. They're allowed to do that because it was dismissed without prejudice previously. Now, the state's complaint, that was fully thrown out. So that's not coming back. But this is from the actual FTC suit.
And what they're accusing Facebook of is what they say is an illegal buy-or-bury scheme to maintain its market dominance. And really, part of the issue of the prior complaint was that they didn't fully flesh out what private social networking industries were or what it was. And so they do that to a larger degree in this.
They basically separate Facebook from the likes of Twitter and TikTok and Netflix, saying that they don't really fit the same description that Facebook itself does. And then they also beef up their explanation as to why they operate as a legal monopoly. So they are really going forward here underneath Chair Lina Khan. She obviously is one of the fiercest tech critics out there.
Facebook had originally tried to get her recused from this, basically saying that because of statements she's made, because of her taking part in the Congress and their look into tech companies and antitrust, that she shouldn't be a part of it. But basically, the FTC had gone ahead and looked at that and said that, no, she's going to stay on board. There's really no issue there.
And then as far as Facebook responding, they essentially said, we're reviewing the FTC's amended complaint. And we'll have more to say soon. And that's from a statement that they posted on Twitter. That's also what they're sharing with media as well.
So this really, I think, is going to be a larger issue. We'll see if this is able to actually get through though, in the first place, unlike the first complaint or the first part of this complaint. And really, what they're seeking is kind of a breakup of Facebook entirely from Instagram and WhatsApp. But that could be the most drastic measure. There's anything in between that the company may have to do to make the FTC happy in this case. Again, that's if this manages to continue to go forward.
AKIKO FUJITA: And Dan, we've learned from past regulatory filings that these things don't always move quickly. What kind of timeline are we looking at right now? And what's the next marker that we should be looking to?
DAN HOWLEY: Well, the next marker would be if this is actually able to go forward with the district judge that originally dismissed it without prejudice. So that's something that we'll have to look at. Facebook is probably going to try to get this dismissed as well. We'll see how that goes. And then if the case actually does end up going forward, this could take years and years.
Obviously, the big example that we always point to is Microsoft, which seemed to just drag on and on. The reason why that might not be favorable though, is because Microsoft ended up behind in a number of categories as they were focusing on that suit. Facebook doesn't want to end up in that position as well. So maybe they're aware of that. I'm sure they are. They're pretty smart people there. And they may be able to continue to innovate while they fight the suit. But it could also eat up a whole bunch of their time. So if they don't settle, it could be years and years for this to go forward.
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