Facebook Hits $1Trillion, Mark, After Judge Dismisses Monopoly Allegation

A US judge has dismissed an antitrust lawsuit against Facebook that sought to force the social media giant to sell Instagram and WhatsApp, saying the federal complaint was “legally insufficient,” sending Facebook shares up more than 4%. After the ruling, the market capitalization of the company shot to a sky-rocked rate of over $1 trillion for the first time in history. 

The ruling was the first major blow to state and federal lawsuits against big tech companies last year, which seek to curb alleged abuses of their massive market power. Judge James Boasberg of the District Court for the District of Columbia said the US Federal Trade Commission had failed to show that Facebook had a monopoly in the social networking market, but the FTC could file a new complaint by July 29. 

He also rejected a lawsuit by several states, saying they waited too long to challenge the acquisitions of Instagram and WhatsApp in 2012 and 2014, respectively. The judge did not invite states to resubmit their complaints at a time when a spokesman for the New York Attorney General’s Office said it was considering our legal options. 

Facebook asked to dismiss lawsuits regarding the FTC’s lawsuit, to which the judge wrote, “While the court does not agree with all of Facebook’s claims here, it ultimately agrees that the complaint of the agency is legally insignificant and insufficient, which therefore should be dismissed.”

“We are pleased that today’s decision acknowledges the flaws in the government complaints” filed against the company, a Facebook spokesperson said. A spokesman for the FTC said the agency was “closely reviewing the opinion and assessing the best option going forward.”

The FTC’s bright spot in the opinion was the judge’s saying that the agency was not solid ground in scrutinizing the Instagram and WhatsApp acquisitions, with the court rejecting Facebook’s argument that the FTC lacks the authority to seek a judicial remedy against these purchases.

The Federal Trade Commission, along with a bunch of states, went forward to file separate lawsuits in 2020, which accused Facebook of breaching antitrust law to keep other low budgeted and small competitors at bay by knocking up the other tie-ups such as Instagram for $1 billion and WhatsApp for $19 billion. Over the matter, the judge remarked that the FTC was not able to adequately support its allegation that claimed Facebook has taken over more than 60% of the market.