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NEW YORK: A judge dismissed a blockbuster antitrust suit against Facebook filed last year by federal and state regulators, saying the lawsuit failed to “plausibly” establish that the social network had created a monopoly.
Facebook shares rose more than 4% after the ruling. The share price rise put Facebook’s market capitalization over $1 trillion for the first time.
The dismissal was the first big blow to state and federal lawsuits against Big Tech firms last year seeking to rein in alleged abuses of their massive market power.
Judge James Boasberg of the US District Court of Washington DC dismissed the case filed in December by the Federal Trade Commission and more than 40 states, which could have rolled back Facebook’s acquisition of Instagram and the messaging platform WhatsApp.
The lawsuit “failed to plead enough facts to plausibly establish a necessary element… that Facebook has monopoly power in the market for personal social networking services,” the judge said in a 53-page opinion, while allowing authorities the opportunity to refile the case with revisions.
In lawsuits filed in December which were consolidated in federal court, US and state officials called for the divestment of Instagram and WhatsApp, arguing that Facebook had acted to “entrench and maintain its monopoly to deny consumers the benefits of competition.”
The judge said the complaint “says almost nothing concrete on the key question of how much power Facebook actually had… it is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist.”
The move comes a week after a US congressional panel advanced legislation which would lead to a sweeping overhaul of antitrust laws and give more power to regulators to break up large tech firms.
The federal government and states filed a total of five lawsuits against Facebook and Google last year following bipartisan outrage over their social media clout in the economy and the political sphere.
The judge said that the FTC did not adequately support its assertion that Facebook has more than 60% of the market. Boasberg said the agency could potentially fix the issue in a refiling.
The judge also criticized portions of the FTC’s case regarding its refusal to allow interoperability permissions with competing apps. Republican Senator Josh Hawley criticized the court’s decision on the FTC lawsuit as “deeply disappointing.”
