F.acebook has achieved a great success in the dispute with American antitrust authorities: A judge in Washington has dismissed a lawsuit filed by the Federal Trade Commission (FTC) in December, at least for the time being. This lawsuit has so far been seen as a major threat to Facebook. The antitrust authorities called for the group to be broken up. After their introduction, he should be forced to give up the two once bought services Instagram and Whatsapp. The judge also dismissed a parallel lawsuit filed by 48 American states.
The decisions ensured that Facebook reached a milestone on the stock exchange. The share price was up four percent, and at close of trading, the company had a market capitalization of more than $ 1 trillion for the first time. Facebook jumped this mark as the fifth American technology company after Apple, Microsoft, Amazon and the Google holding company Alphabet.
Does Facebook have a monopoly?
Judge James Boasberg’s verdict is a serious setback for the FTC because it was harshly worded and goes to the heart of the competitive process. He called the lawsuit “legally inadequate” and said the agency had not provided enough facts to prove that Facebook has a monopoly on the social networking market. You only vaguely claimed that the company had more than 60 percent of the market and that that was too “speculative”. In the “key question” of how much power Facebook actually possesses, the FTC did not provide enough concrete evidence, as if it expected the court to simply accept the “popular opinion” that the company was a monopoly.
This does not necessarily end the cartel dispute, however, because Judge Boasberg has left a door open for the authorities. He is now giving her 30 days to file a modified lawsuit. It is different in the case of the lawsuit of the federal states, which Boasberg dismissed without the option of rectification. He justified this by saying that too much time had passed between the acquisitions of Instagram and Whatsapp in 2012 and 2014 to be able to reverse them at the request of states. However, he did not use this statute of limitations at the federal level in the FTC case.
Other internet giants are also in their sights
For Facebook and for the American tech giants in general, the judge’s decision after a series of bad news about threatened interference with their business models is a welcome respite. Both on their American home market and in Europe, the corporations are constantly faced with new maneuvers from politicians and regulators who want to curtail their power.
A competition lawsuit was also filed against Google in the United States last year – in this case by the Justice Department, the country’s second major antitrust authority. Antitrust investigations are also ongoing against Apple and Amazon, but these have not yet led to a lawsuit.
Just two weeks ago, the House of Representatives tabled a handful of new bills in Congress that introduce significant changes to American antitrust law. Among other things, it is supposed to make it more difficult for tech companies to get approval for acquisitions under competition law.
Politicians who are calling for stricter antitrust laws saw the Facebook decision on Monday as proof that there is a need for action in competition law. Ken Buck of the Republican Party, who sits in the House of Representatives and brought some of the bills in motion, tweeted: “Antitrust reform is urgently needed.” Congress must give the antitrust authorities additional tools and resources to counteract competition violations big tech companies can take action.
The decision gives the FTC chief Lina Khan, who has just started, a huge challenge right from the start. Khan has made a name for herself as an eloquent critic of the tech giants, her calling was a clear signal that the American government under President Joe Biden wants to show hardship towards the industry.
If she wants to pursue the Facebook case further, she now has the task of modifying the Facebook lawsuit in order to convince the judge.