- The dismissal was the first major blow to state and federal lawsuits filed against Big Tech firms last year;
- The actions were aimed at reining in alleged abuses of the massive market power wielded by the companies;
- Facebook shares rose more than 4% after the ruling was issued;
- The share price rise put Facebook’s market cap over $1 trillion for the first time.
The dismissal was the first major blow to state and federal lawsuits filed against Big Tech firms last year. The actions were aimed at reining in alleged abuses of the massive market power wielded by the companies.
The judge also dismissed a lawsuit filed by multiple U.S. states in December, saying that they had waited too long and could not challenge acquisitions from so long ago. A spokesperson for the New York Attorney General’s office said it was reviewing the decision and “considering our legal options.”
Judge James Boasberg of the U.S. District Court for the District of Columbia said the FTC had failed to show that Facebook had monopoly power in the social-networking market.
The judge said that the FTC could file a new complaint by July 29.
Facebook had asked for the lawsuits, which were filed last year, to be dismissed.
Regarding the FTC lawsuit, the judge wrote: “Although the court does not agree with all of Facebook‘s contentions here, it ultimately concurs that the agency’s complaint is legally insufficient and must therefore be dismissed.”
A bright spot for the FTC in the opinion was the judge’s saying that the agency was “on firmer ground in scrutinizing the acquisitions of Instagram and WhatsApp, as the court rejects Facebook argument that the FTC lacks authority to seek injunctive relief against those purchases.”
A Facebook spokesperson said: “We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook.” The FTC did not immediately respond to a request for comment.
Republican Senator Josh Hawley criticized the court’s decision on the FTC lawsuit as “deeply disappointing.”
The FTC and a big group of states filed separate lawsuits last year that accused Facebook of breaking antitrust law to keep smaller competitors at bay by snapping up rivals, such as its 2012 acquisition of Instagram for $1 billion and of WhatsApp in 2014 for $19 billion.
All told, the federal government and states filed five lawsuits against Facebook and Alphabet’s Google last year following bipartisan outrage over use and misuse of social media clout both 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 percent of the market.
“Because this defect could conceivably be overcome by re-pleading, however, the Court will dismiss only the Complaint, not the case, and will do so without prejudice to allow Plaintiff to file an amended Complaint,” the judge wrote.
The judge also criticized portions of the FTC’s case regarding its refusal to allow interoperability permissions with competing apps.