In Huge Blow To Antitrust Efforts Against Big Tech, Federal Judge Dismisses Suits Against Facebook

In a massive blow to Congress’ effort to rein in Big Tech, a federal judge threw out antitrust lawsuits leveled against Facebook by the Federal Trade Commission and more than 40 states.

In December 2020, both the Federal Trade Commission and 48 states accused Facebook of “buying up its rivals to illegally squash competition” and “cement its dominance over social media,” according to The New York Times.

These lawsuits were built on the argument that Facebook’s acquisition of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion — in addition to other smaller companies — were part of the wider effort to achieve a monopoly.

On Monday, James E. Boasberg for the U.S. District Court for the District of Columbia said that the case needed to be dismissed because “too much time had elapsed since the alleged offenses took place,” explained The New York Times. 

“The states, led by Letitia James, the New York attorney general, accused Facebook in December of buying up nascent competitors like Instagram and WhatsApp — deals made in 2012 and 2014 — to cement its monopoly over social networking,” the report added. “In a separate, 53-page opinion, he said the complaint by the Federal Trade Commission, also filed in December, failed to provide enough facts to back its claims that Facebook had a monopoly over personal social networking.”

“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,” the filing from U.S. District Court for the District of Columbia reads. “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 is undoubtedly light on specific factual allegations regarding consumer-switching preferences,” the court wrote. “These allegations — which do not even provide an estimated actual figure or range for Facebook’s market share at any point over the past ten years — ultimately fall short of plausibly establishing that Facebook holds market power.”

As CNBC pointed out, the filing also noted that the FTC’s complaint “seemed to assume that the court would agree Facebook is a monopoly.”

“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,” the filing reads. “It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist.”

Facebook’s stock price rose more than 4% following the news, “sending the social media company’s market capitalization above $1 trillion for the first time,”

“We are pleased that today’s decisions recognize the defects in the government complaints against Facebook,” the Silicon Valley company said in a statement. “We compete fairly every day to earn people’s time and attention and will continue to deliver great products for the people and businesses that use our services.”

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