A judge said the U.S. Federal Trade Commission has been unable to respond to the weight to establish that Facebook has a monopoly on social media.
Facebook Inc. won the license of two antitrust cases filed by the federal government and a coalition of states when a judge dismissed the lawsuits. The actions of the social media platform are increasing.
James Boasberg, U.S. district judge in Washington on Monday granted Facebook’s request to reject the complaints, filed last year by the U.S. Federal Trade Commission and state attorneys general led by Letitia James of New York.
The judge said in the opinion that the FTC failed to respond to the weight to establish that Facebook has a monopoly on social networks. He said the agency could file the complaint in 30 days.
“Although the court does not agree with all of Facebook’s disputes here, it ultimately agrees that the agency’s complaint is legally insufficient and should therefore be rejected,” Boasberg wrote.
Facebook shares have risen as much as 4.4% in New York since the decision.
With the decision, Facebook has escaped – at least for now – the most significant regulatory threat to its business by coming out of the widest repression of American tech giants.
The decision gives a blow to the FTC and the states, which claimed that Facebook violated antitrust laws including Instagram photo sharing app and WhatsApp messaging service to cut emerging competitive threats and protect its monopoly.
It put a new emphasis on antitrust legislation advanced by the Judiciary Committee last week that would make it easier for law enforcement to challenge anti-competitive behaviors from larger technology platforms.
Boasberg’s decision to launch Facebook complaints shows the obstacles American antitrust enforcers face in trying to confront the internet giants. Officials on their own cannot divest companies or impose other remedies, but instead have to convince judges to act. The process can take years.
Facebook lawsuits were filed in December as part of an widespread crackdown by American tech giants. The cases follow a complaint by the Department of Justice against Alphabet Inc. for alleged monopolization of Internet research, and the results of a House investigation accusing technology companies of abusing their dominance. Then, lawmakers proposed a slew of bills that would launch a wide regulatory network over companies.
Facebook’s lawsuits have centered on the 2012 acquisition of Instagram and the acquisition of WhatsApp since 2014. Officials say Facebook did the business because it saw the two companies as threats to their activities. Instead of competing with its products, Facebook followed CEO Mark Zuckerberg’s mantra: “It’s better to buy than to compete,” according to the FTC complaint.
Facebook offered $ 1 billion to Instagram when it had only 25 million users and had no revenue, but it had already begun to capture the market for mobile photo sharing. Zuckerberg said the threat from Instagram was “really scary,” according to the FTC complaint. The company paid $ 19 billion for WhatsApp because it saw messaging apps as another danger to its business. A Facebook executive said the app “could be the biggest threat we’ve ever had as a company,” the FTC complaint said.
Facebook has attacked complaints for several reasons. One of his key arguments was that the FTC investigated both acquisitions when they were announced and allowed both transactions to proceed. While antitrust law enforcement may challenge complete mergers, Facebook argued that the FTC’s case was never forthcoming and the agency never explained why its previous decisions approving the acquisitions were wrong. The government just wants a “do,” Facebook said.
The company had also argued that a U.S. Supreme Court ruling in April restricting the FTC’s authority to recover money for fraudulent consumers requires that the complaint be dismissed.
The case is Federal Trade Commission v. Facebook Inc. 20-cv-3590, U.S. District Court, District of Columbia (Washington).