Facebook Inc. is one of the world’s most valuable companies and is regarded as one of the top five companies in the United States in the Information Technology sector with Apple, Microsoft, Google, and Amazon. The company is based in California’s Menlo Park and was initially started by Mark Zuckerberg and his roommates at Harvard College.
The company had suddenly found itself amid two antitrust lawsuits filed by the U.S. government and a coalition of states that aimed towards breaking up the company. However, the court had recently ruled that the cases are to be dismissed, which comes as a big blow to the antitrust officials who had tried to take on one of the biggest tech companies. They had accused the company in Dec 2020 of having anti-competitive conduct and having a “buy or bury” approach, wherein it strategically brought its competitors or cut off their services if they were likely to threaten its monopoly powers. During that time, FTC has stated that it will be requesting the court to penalize Facebook and to even break it away from its acquisitions, namely, Instagram and Whatsapp (Companies that the tech giant had bought in 2012 and 2014 for $1 Billion and $19 Billion respectively).
The bench was led by US District Judge James Boasberg in Washington, and the subsequent decision has helped Facebook shares to soar in the market, thus, making the company’s market value to be more than $1 Trillion. The judge agreed to the company’s application and dismissed the complaints filed against it just last year by US FTC (Federal Trade Commission) and the state attorney general. The judgment stated that FTC has failed to meet the burden of proof and was unable to establish that Facebook can be considered as a monopoly in social networking.
The judge took FTC to task for being unable to detail in what manner Facebook could be said to have a monopoly in the market that the agency referred to as Social Networking. Further, he narrated that the Agency claiming that Facebook easily acquires more than 60% of the market cannot be agreed to as the definition of the market is too vague, making the statement “to speculation and conclusory.” Even then, the agency still holds the right to refile the complaint within 30 days.
The judge, in his ruling, berated FTC stating that their arguments didn’t prove anything concrete on how much power Facebook held in the market and went on to say that it seemed “ the agency expected the court to simply nod to the conventional wisdom” that Facebook has a monopoly. After the ruling, Facebook’s share price gained 4.2% and closed at $355.64 in New York on June 28, 2021. This was the biggest single-day increase since April 29. The stock price for the company has increased by 30% since last year; however, it went down to 1.28%, however in the early Tuesday trade, it went down by 1.28 percent. The company’s spokesperson announced that they are pleased with the judgment and that it successfully recognized the faults in the government complaint filed against Facebook.
The judgment might again bring up the argument that US antitrust laws and outdated and need to be changed. Members of Congress are debating that new laws are needed urgently so that it is easier to prosecute big technology companies who abuse their dominant power.