A federal judge has allowed the Federal Trade Commission's antitrust case against Facebook to proceed, reversing the agency's earlier courtroom defeat and preserving a government challenge that ultimately could seek major structural remedies involving Instagram and WhatsApp.

U.S. District Judge James E. Boasberg denied Facebook's motion to dismiss Tuesday, concluding that the FTC's revised complaint contains enough factual detail to plausibly allege that Facebook holds monopoly power in U.S. personal social networking. The 48-page opinion says the commission has now cleared the pleading threshold even though it still faces a substantial burden to prove its case.

The FTC gets a second chance after its first complaint failed

Boasberg dismissed the agency's initial complaint last June because it did not adequately support the assertion that Facebook possessed monopoly power. The FTC responded in August with a more detailed filing alleging that Facebook maintained dominance through a 'buy-or-bury' strategy focused on emerging mobile competitors.

The commission's amended-case announcement accused Facebook of neutralizing threats by acquiring Instagram and WhatsApp and by imposing conditions on third-party developers that reduced the possibility of new rivals emerging from its platform.

The underlying amended complaint adds market-share data and argues that Facebook has held monopoly power in U.S. personal social networking since at least 2011. It points to network effects, switching costs and users' accumulated social connections as barriers that make it difficult for a new entrant to challenge an established network.

Instagram and WhatsApp remain at the center of the case

The FTC's theory focuses heavily on Facebook's 2012 acquisition of Instagram and its 2014 acquisition of WhatsApp. The agency argues that both companies represented emerging competitive threats and that Facebook chose acquisition rather than head-to-head competition.

The original 2020 lawsuit sought a permanent injunction and left open the possibility of divestitures involving Instagram or WhatsApp. Those are unusually aggressive remedies, especially because both deals were reviewed years ago, but the FTC contends that antitrust law allows the government to challenge consummated acquisitions when later evidence shows they helped maintain monopoly power.

A Washington Post report said Boasberg found the revised complaint more robust and detailed than the first and concluded that the agency had done enough to proceed to discovery. The judge nevertheless cautioned that whether the FTC will ultimately prove its allegations remains uncertain.

Facebook wins on one theory but loses the dismissal motion

The ruling is not a complete victory for the FTC. Boasberg declined to revive one portion of the government's case involving restrictions on interoperability with third-party apps, reasoning that Facebook had discontinued the challenged policies years ago. But he allowed the central monopolization theory involving acquisitions to continue.

A contemporaneous Reuters account described the decision as one of the most significant government challenges to a major technology company in decades, particularly because the case seeks potential remedies that could reshape Meta's core businesses.

The court's January 11 order formally denied the motion to dismiss and directed Facebook to answer the amended complaint by January 25.

The ruling also rejects Facebook's challenge to FTC Chair Lina Khan

Facebook had argued that FTC Chair Lina Khan should have been recused because of her prior academic and policy work criticizing technology-platform concentration. Boasberg rejected that argument, finding no impermissible conflict that invalidated the commission's vote to bring the revised case.

That part of the opinion matters beyond Facebook. Khan's appointment has signaled a more aggressive approach toward dominant technology companies, and other large firms have questioned whether her earlier scholarship creates conflicts in matters involving their businesses. The court's reasoning suggests that strong preexisting policy views do not by themselves disqualify an official from participating in an agency enforcement decision.

The immediate result is that the FTC can now seek evidence through discovery and attempt to prove that Facebook's acquisitions were part of a broader strategy to preserve monopoly power. Facebook, now operating under the Meta Platforms corporate name, continues to deny that the deals harmed competition and argues that its investments helped Instagram and WhatsApp grow.

For the technology industry, the case has become a test of whether traditional antitrust law can be applied to free consumer platforms whose competitive harms may appear in privacy, innovation and product quality rather than straightforward price increases. The court has not decided those questions. It has decided only that the FTC's revised allegations are sufficiently developed to be heard.