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US Judge Dismisses Antitrust Lawsuit Against Facebook Resulting In Surge In Market Value To Over $1 Trillion


06/29/2021


US Judge Dismisses Antitrust Lawsuit Against Facebook Resulting In Surge In Market Value To Over $1 Trillion
Federal and state antitrust complaints against the social media giant Facebook seeking a court order to force the company to sell Instagram and WhatsApp was dismissed by a judge in the United States on Monday. In the ruling the court said that the federal complaint was "legally insufficient."
 
The news of the court decision caused a 4 per cent surge in the stock price of the company which propelled the total market capitalization of the company at more than $1 trillion for the first time.
 
This latest court ruling is the first blow to the lawsuits of state and federal lawsuits against Big Tech firms that were filed last year aimed to curb the alleged misuse of their massive market power.
 
The FTC had failed to provide evidence that Facebook had monopoly power in the social networking market, said judge James Boasberg of the US District Court for the District of Columbia. However they also noted that the FTC could file a new complaint by July 29.
 
A lawsuit by multiple US states was also dismissed by the judge and said that the parties had been waiting too long and sitting on their heels to challenge the acquisitions of Instagram and WhatsApp by Facebook which had happened in 2012 and 2014 respectively. the states were not invited by the judge to refile their complaint.
 
It was "considering our legal options", said a spokesperson for the New York Attorney General’s office.
 
Facebook had requested the court to dismiss the lawsuits.
 
"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 judge wrote in his order in relation to the FTC lawsuit.
 
"We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook." An FTC spokesperson said the agency was "closely reviewing the opinion and assessing the best option forward," said a Facebook spokesperson.

However despite the case being dismissed by the judge, there was a sliver lining for the FTC in the opinion with the judge's saying that the agency was "on firmer ground in scrutinizing the acquisitions of Instagram and WhatsApp, as the court rejects Facebook's argument that the FTC lacks authority to seek injunctive relief against those purchases."
 
Last year, a big group of states and the FTC had filed separate lawsuits against Facebook accusing the social media company of having broken antitrust law and using its market dominating power to keep smaller competitors at bay by acquiring rival companies such as Instagram for $1 billion and WhatsApp for $19 billion.
 
Last year, a total of five lawsuits against Facebook and Alphabet Inc's Google were filed by the US federal government and states after there was bipartisan outrage against the companies over their social media clout in the economy and the political sphere.
 
There was not enough support to the FTC’s assertion that Facebook has more than 60 per cent of the market, the judge said. However this issue could be fixed in a refilling by the FTC, Boasberg said.
 
(Source:www.moneycontrol.com)