A federal judge in Washington DC dismissed two antitrust (competition) lawsuits against Facebook brought by the U.S.’s trade regulator, the Federal Trade Commission (FTC), and a coalition of 48 states and jurisdictions. The cases alleged that Facebook crushed competition by buying out its rivals like WhatsApp and Instagram. After the ruling, Facebook’s shares hit record highs and its market capitalization crossed $ 1 trillion for the first time.
Judge James Boasberg dismissed the FTC case on Monday, saying it was “legally insufficient” and did not provide enough evidence that Facebook had a market share of at least 60% in the social-networking market. The judge said that in goods markets , market share could be calculated using revenue or units sold for instance, but “ this case involves no ordinary or intuitive market.” However, the judge did not dismiss the underlying complaint in the case and gave the FTC time until July 29 to file a new complaint.
In the second case, brought by a coalition led by the State of New York, the plaintiffs had alleged that Facebook’s acquisition of Instagram in 2012 and WhatsApp in 2014 ran afoul of competition law. In dismissing this case, the judge said there had been a “long delay” between the underlying events and the lawsuit.
The FTC and the New York Attorney General’s office said that they are reviewing the decision as they decide their way forward.
The judge’s actions come as regulators have sought to break up Facebook and as both Democrats and Republicans have been tightening the screws on Big Tech. In June, the administration named Lina Khan, a progressive who has been critical about how large tech companies have wielded their market power, as chairwoman of the FTC.
Pressure has also been growing from Congress. The Judiciary Committee of the U.S. House of Representatives voted last week to send a package of six bills focussed on antitrust (competition) issues in the tech sector to the full House floor for a vote. The package included legislation to increase merger fees, block big tech companies from buying potential competition and curbs on these companies favouring their own products online over those of their competitors’.
Following the judge’s decision, Facebook’s share price increased to a new high of $358.03 on Monday afternoon and the company crossed a market capitalisation of $ 1 trillion for the first time.
Facebook welcomed the ruling and said it competes fairly.
“We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook. 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." a Facebook spokesperson said.
Published - June 29, 2021 02:16 am IST
