Facebook hits $1 trillion market cap after federal court dismissed FTC’s antitrust complaint

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In an opinion published Monday afternoon, Judge James Boasberg of the US District Court for the District of Columbia said the FTC “failed to provide sufficient facts to establish … that Facebook (FB) has a monopoly in the personal social services market. PSN ).”

Boasberg writes that the FTC has not done enough to support its assertion that Facebook holds a “excess 60%” share of the social media market.

Facebook’s stock ended Monday up more than 4% following the news, pushing the company’s market value above $1 trillion for the first time.

The Federal Trade Commission (FTC) has alleged that Facebook has violated the country’s antitrust laws by acquiring startups like Instagram that it sees as a threat to its dominance, and by blocking others from connecting to Facebook’s services.

“We are pleased that today’s decisions acknowledge the flaws in the government complaints filed against Facebook,” the company said in a statement.

Agency spokesman Lindsay Krizak said the FTC is closely reviewing the judge’s opinion and determining its next steps.

The decision is a setback for antitrust regulators who have called for the company to be dismantled. But while the judge dismissed the FTC’s complaint, he generally dismissed the case, saying that issues related to the FTC’s lawsuit could be addressed if the agency filed an amended complaint.

The Boasberg ruling – a respite for Facebook in the midst of constant scrutiny from regulators around the world – immediately prompted further calls for Congress to update the country’s antitrust laws.

“Today’s development in the FTC v. Facebook shows that there is an urgent need for antitrust reform,” Representative Ken Buck, the ranking Republican on the House Judiciary Committee, wrote on Twitter. “Congress needs to provide additional tools and resources for our antitrust enforcement agencies to go after big tech companies that engage in anticompetitive behavior.” Last week, the commission introduced a package of landmark laws that would enable antitrust regulators at the Federal Trade Commission and the Department of Justice to crack even Big Tech platforms like Amazon, Apple, Facebook and Google.

Facebook’s critics, including House lawmakers in a groundbreaking report last summer, accused Facebook of targeting small startups like Instagram early in those companies’ lifecycles, believing it to be a threat to Facebook’s power. This “buy or bury” strategy allegedly helped Facebook maintain its position as a top-tier social networking company.

In a separate decision, Boasberg completely dismissed a similar antitrust lawsuit against Facebook brought by dozens of state governments, saying they waited too long to challenge Facebook’s acquisitions of Instagram and WhatsApp, which were completed in 2012 and 2014, respectively.

“We are reviewing this decision and considering our legal options,” said a spokesman for the New York Attorney General, Letitia James, one of the government’s top aides in the case.

In their lawsuits, states and the Federal Trade Commission also alleged that Facebook acted anti-competitively by blocking competing apps from accessing the social media giant’s platform. Boasberg wrote in an opinion Monday that there is nothing illegal in having Facebook’s policy to prevent interoperability with third-party apps. He conceded that while Facebook may have violated antitrust law in implementing its policy, the lawsuits came too late to be enforceable.

It’s highly unusual for judges to dismiss federal or state lawsuits at such an early stage, said William Kovacic, the former chair of the Federal Trade Commission.

“Don’t expect to be sent off in the first half,” he said. Kovacic added that the FTC was anticipating a tough court battle. “If this is a sports match, this is a bad start to the match. But that in no way means the end of the match.”

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