The US government has suffered a serious setback in trying to dismantle Facebook in court. A Washington judge has dismissed a related FTC lawsuit. You haven’t proven that Facebook has a monopoly on the social media market, he said in his decision released on Monday. However, he left the power to submit an updated complaint within 30 days. However, the judge completely dismissed a similar lawsuit from more than 40 states.
In the lawsuit filed in December, the FTC accused Facebook of unfair competition and wanted to split Instagram and WhatsApp. Facebook bought the photo platform and the chat service to protect its dominance from rivals, is their argument. States backed up the allegations with their own lawsuits.
A key question now is how President Joe Biden’s administration intends to handle the case – the trial dates back to the days of his predecessor Donald Trump. However, Lina Khan – a well-known critic of the competitive position of big tech companies – was recently appointed to head the FTC. The lawsuit was initiated by then-Trump-appointed FTC chief Joseph Simons and the two Democratic Party commissioners, while both Republicans voted against.
The judge sharply criticized the agency’s lawyers. “The FTC lawsuit says almost nothing specific about the power that Facebook had and still has in a well-defined product market,” he wrote. “It’s as if the agency wants the court to drop the general belief that Facebook is a monopoly.” The legal notion of a monopoly position is precisely defined and relates to a clearly defined market.
Facebook’s market value reached over $ 1 trillion for the first time
Facebook had asked the court in March to dismiss the FTC lawsuit – among other things because the authority had too vaguely described the market in which Facebook was active. After the judge’s ruling became known, Facebook shares rose a good four percent – and for the first time passed the trillion dollar mark (838 billion euros) in terms of market value.
Facebook bought Instagram in 2012 for about $ 1 billion and WhatsApp in 2014 for about $ 22 billion in the end. Both services now have over a billion users. U.S. competition law enforcement authorities have approved Instagram and WhatsApp takeovers. The judge dismissed the state’s lawsuit because it had allowed too much time to pass since the acquisitions.
There had already been calls in the past to remove Instagram and WhatsApp from Facebook. In recent years, the group has brought the infrastructure behind the platform closer to its online network as well as more closely Instagram and WhatsApp. This would make a split technically more difficult.
After the judge’s ruling, calls for tougher laws against the tech giants were immediately heard in the US Congress. In the House of Representatives, the chairman of the Legal Affairs Committee, Jerrold Nadler, and the chairman of the Cartel Subcommittee, Davon Cicillin, claimed that, in their view, Facebook had a monopoly position. They referred to the tech industry competition laws the Democrats launched a few days ago.