Judge Dismisses Antitrust Cases Against Facebook From FTC and More Than 40 States

A federal judge on Monday dismissed two antitrust lawsuits against Facebook brought by the Federal Trade Commission and more than 40 states, The New York Times reports.

Judge James Boasberg dismissed a lawsuit from New York Attorney General Letitia James and 45 other state prosecutors, which argued that Facebook violated antitrust laws by buying up competitors Instagram and WhatsApp.

Boasberg argued that the states had waited too long to bring the suit, noting that the deals were made in 2012 and 2014.

The judge also noted that antitrust regulators did not try to block the deals when they happened and rejected the states’ claims that Facebook restricted users’ ability to easily interact with competitor apps.

“Ultimately, this antitrust action is premised on public, high-profile conduct, nearly all of which occurred over six years ago,” he wrote, “before the launch of the Apple Watch or Alexa or Periscope, when Kevin Durant still played for the Oklahoma City Thunder and when Ebola was the virus dominating headlines.”

FTC, too:

Boasberg also threw out the federal government’s lawsuit, which similarly focused on Facebook’s acquisition of rivals.

The judge said the FTC could try to sue again in 30 days but that its current lawsuit fails to provide enough evidence that Facebook holds a monopoly over social media.

“It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist,” he wrote. “After all, no one who hears the title of the 2010 film ‘The Social Network’ wonders which company it is about.”

But, he added, “‘monopoly power’ is a term of art under federal law with a precise economic meaning.”

“This really stings,” former FTC Chairman William Kovacic told the Times. “This is a reminder to those who have wanted a dramatic, sweeping litigation campaign to take on Big Tech that there’s nothing easy about it, because the courts have a different view of the antitrust system.”

Facebook celebrates, but for how long:

The news pushed Facebook’s stock past $1 trillion in market cap for the first time.

“We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook,” said Facebook spokesman Christopher Sgro. “We compete fairly every day to earn people’s time and attention and will continue to deliver great products for the people and businesses that use our services.”

But lawmakers said the ruling underscores the need for federal antitrust legislation to rein in the social network.

“Today’s development in the F.T.C.’s case against Facebook shows that antitrust reform is urgently needed,” said Republican Colorado Rep. Ken Buck. “Congress needs to provide additional tools and resources to our antitrust enforcers to go after Big Tech companies engaging in anticompetitive conduct.”

“The court rejected the F.T.C.’s case because it wasn’t clear under our current antitrust laws that Facebook has a monopoly in online networking — a flabbergasting assertion given Facebook’s firm grip over consumers, their data and the social media market,” said Democratic Connecticut Sen. Richard Blumenthal.

 

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