U.S. Judge Tosses Antitrust Lawsuit Brought By the FTC Against Facebook and Instagram

U.S. Judge Tosses Antitrust Lawsuit Brought By the FTC Against Facebook and Instagram
Photo: JOEL SAGET / Staff, Getty Images

A U.S. federal judge on Monday dismissed an antitrust complaint brought by the U.S. Federal Trade Commission against Facebook, claiming that the evidence presented by the agency had not sufficiently proven that the social media giant held monopoly power over other social media platforms.

In the initial complaint, the FTC had accused Facebook of controlling more than 60 per cent of the social media market, resulting in a de-facto monopoly that had existed since at least 2011 that was comparable to “no other social network … in the United States.”

A separate suit brought by a group of state attorneys general had sought to unwind Facebook’s acquisitions of Instagram and WhatsApp, arguing that those deal in particular had been part and parcel to the kind of anticompetitive tactics Facebook has long used in order to all but ensure that the company retains its dominance in social networking. That suit was also tossed out, with the court ruling that the states had waited too long to challenge Facebook’s acquisition of the companies, which were acquired in 2012 and 2014, respectively.

In his dismissal of the complaints on Monday, Judge James E. Boasberg wrote that the FTC had been almost glib in its arguments — “… almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist.”

“The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services,” Boasberg wrote. “The complaint contains nothing on that score save the naked allegation that the company has had and still has a ‘dominant share of th[at] market (in excess of 60%).’”

News of the dismissal likely comes as a rare bright spot for Facebook, which is currently one of several companies in the crosshairs of a bipartisan slate of antitrust bills recently advanced in the House of Representatives. The legislation aims to bring Big Tech to heel, focusing on dismantling the market stranglehold currently enjoyed by companies like Apple, Amazon, Google and Facebook.

Rather than quell the growing anti-monopoly sentiment in Washington, news of Monday’s dismissal seemed to galvanize lawmakers.

“Today’s development in the FTC’s case against Facebook shows that antitrust reform is urgently needed,” Rep. Ken Buck (R-CO), ranking member on the House Judiciary Committee’s antitrust subcommittee, wrote in a Monday tweet. “Congress needs to provide additional tools and resources to our antitrust enforcers to go after Big Tech companies engaging in anticompetitive conduct.”