Court kills FTC, US states' antitrust complaints against trillion-dollar Facebook

Watchdog has 30 days to try again or let it go


A US federal court on Monday threw out an antitrust complaint that threatened to break up Facebook.

The lawsuit, brought by the FTC, was dismissed because the judge felt the regulator had not provided sufficient evidence to back up its allegations of market abuse by the social network, and had wrongly assumed the Washington DC court would simply agree that Facebook is a monopoly.

A parallel case brought by state attorneys general, which sought to "halt Facebook’s anticompetitive conduct," was also binned.

Meanwhile, Facebook's market cap closed above the trillion-dollar mark for the first time. Its share price stands at $355.64 apiece, up four per cent today and 52 per cent over the past year.

The FTC's high-profile case alleged Facebook broke America's antitrust laws by systematically acquiring upcoming rivals – primarily Instagram and WhatsApp – and placing anti-competitive restrictions on software developers. This, we're told, left netizens "with few choices for personal social networking, and deprives advertisers of the benefits of competition."

However, Judge James Boasberg scrapped the complaint, and said the watchdog had failed to provide convincing evidence that Facebook is, indeed, a monopoly.

“The agency’s complaint is legally insufficient and must therefore be dismissed,” he ruled [PDF].

“The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services. The complaint contains nothing on that score save the naked allegation that the company has had and still has a 'dominant share of th[at] market (in excess of 60 per cent).'

"The FTC’s complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market. It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist."

The complaint was not completely thrown out: the FTC can file an amended suit in the next 30 days, addressing the judge's criticism, if it wants to continue the case. “The FTC is closely reviewing the opinion and assessing the best option forward,” a spokesperson told us.

No one at Facebook was willing to give a comment in time for publication.

Finally, that sister case brought by 46 attorneys general across the country as well as DC and Guam was booted out with no chance of a return. The judge said too much time had passed since Facebook's 2012 and 2014 acquisitions of Instagram and WhatsApp, respectively, and that the states had fail to demonstrate how the social network had broken the law by "preventing interoperability with competing apps." ®

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