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The judge dismissed two antitrust lawsuits against Facebook, one by the Federal Trade Commission and the other by a coalition of U.S. states, inflicting a heavy blow on regulators and sending social media group share prices to record levels.
In a statement Monday, Judge James Boasberg in Washington, DC, said the FTC’s lawsuit is “legally insufficient” and that the federal agency “failed to plead sufficient data” that Facebook has the power to have a monopoly on the social media market.
However, the FTC will have 30 days to file a new complaint, he added.
Boasberg also dismissed a similar case prosecuted by a group of 46 states and two other jurisdictions, led by New York Attorney General Letitia James, alleging that the alleged violations occurred too long ago.
Facebook’s share price has jumped more than 4 percent, according to news reports, reaching a high of $ 357.36, and the company has surpassed a $ 1 billion capitalization for the first time.
“We are pleased that today’s decision recognizes the flaws in government complaints filed against Facebook,” a Facebook spokesman said, adding that the company “competes fairly daily to gain people’s time and attention.”
The verdict causes a major delay for regulators in December accused the company’s anti-competitive behavior, including a “buy or bury” approach, to strategically take out rivals or cut off services for those who threatened its monopoly power.
The FTC said at the time it was seeking sanctions, including forcing Facebook and Instagram to break off WhatsApp in 2012 and 2014 for $ 1 billion and $ 19 billion in purchases.
The lawsuits are part of a broader effort by the U.S. government to deny Big Tech power, amid allegations of monopolistic practices and the abuse of market dominance. Google too antitrust lawsuit Brought by the U.S. Department of Justice.
In a blurry opinion on Monday, Boasberg said the FTC said Facebook has a “unprotected” and “naked” share of more than 60 percent of its social media market, which the agency has not clarified how it calculated the figure.
“[W]Despite the hatred that can be hated by the people, “the power of monopoly” is an art term under federal law that has a specific economic meaning: the ability to raise prices profitably or exclude competition in a properly defined market, ”he wrote.
However, the FTC may be able to correct these errors in a new lawsuit, he added.
Boasberg said there was no case for allegations that the company cut off services from rivals because the conduct was too far-fetched in the past. But “the agency is stronger in examining Instagram and WhatsApp purchases,” he added.
As for the state lawsuit, the delays in prosecuting those purchases were “unreasonable and unjustified as they were legal,” he wrote.
A spokesman said New York’s attorney general is reviewing the decision. Could not comment to FTC.
The ruling shows the challenges facing those trying to redefine US antitrust law for the digital age.
Regulators have traditionally shown that companies abuse their market power by showing customers that they have unfairly raised their prices.
Such as Lina Khan, a famous Big Tech critic and Newly appointed FTC Chair, have argued that companies can abuse the power of their market even without charging anything, whether it’s by spoiling services or asking customers for more and more personal data.
“This suggests that the competitive ecosystem here is relatively broad and dynamic,” said Maureen Ohlhausen, a former FTC commissioner who is now a partner in the law firm of Baker Botts and has previously worked on other Facebook accounts. “Aside from saying this is a big company, a lot of people use it, it’s not enough.”
Doug Melamed, a Stanford law professor and one of the lawyers who brought the most important lawsuit against the competition against Microsoft in 1998, said: “Obviously the FTC team wants to move very aggressively. But what they really need is skilled litigation, rather than feeling good. which can make good legal arguments. “
It is likely that the judgments will add weight to the argument of some progressives that anti-US monopoly laws are outdated. They are members of Congress currently being discussed legislation that would make it much easier to prosecute large technology companies.
“The power of Facebook is obvious, and yet we have the judge here to delve into the tremendous details of what makes up the market,” said former FTC President Bill Kovacic. “The law will be kept as a specific example of why we need to change.”
Kovacic announced that the FTC would reopen its case, adding, “This is not just a Facebook case, but the future of the agency itself.”
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