Court dismisses competition lawsuit – Facebook share breaks trillion mark

Facebook logo in front of the headquarters

It was thumbs up for the social media group on Monday.

(Photo: AP)

Washington The US government has suffered a severe setback in trying to get Facebook broken up in court. A judge in Washington dismissed a complaint from the FTC.

The FTC has not been able to show that Facebook has a monopoly in the market for social networks, he argued in his decision published on Monday. The Facebook share rose by more than four percent. The market capitalization rose above the one trillion dollar mark for the first time, according to CNBC.

The FTC accused Facebook of unfair competition in the lawsuit filed in December and wanted to achieve a split from Instagram and WhatsApp. Facebook bought the photo platform and the chat service to protect its dominance from its rivals, is their argument. 40 states also filed a similar lawsuit of their own.

A central question now is how the administration of President Joe Biden intends to deal with the case – he had inherited the lawsuit from his predecessor Donald Trump. However, Lina Khan – a well-known critic of the competitive position of large tech companies – was recently appointed as the new head of the FTC.

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Facebook requested the court to dismiss the lawsuit – among other things because the FTC had too vaguely outlined the market in which Facebook was active.

Long doubts about the FTC reasoning

While Judge James Boasberg completely dismissed the prosecutors’ complaint, he gave the FTC 30 days to better substantiate their complaint. He disagrees with all of Facebook’s arguments, Boasberg said.

When filing in support of its question, the FTC wrote: “Facebook’s actions to consolidate its monopoly are denying consumers the benefits of competition. Our goal is to drive back anti-competitive behavior on Facebook and restore competition. ”

Even then, lawyers had their doubts as to whether the prosecutors and the FTC would get away with their allegations. “You have to prove in court that there was exclusionary behavior and harm to consumers,” said James Keyte, director of the antitrust law institute at the prestigious Fordham University at the time.

So far, Facebook has argued that the government had no concerns at the time of the Instagram and WhatsApp acquisitions nine and seven years ago, respectively.

Splitting technically difficult

Facebook bought Instagram for around $ 1 billion in 2012 and WhatsApp for around $ 22 billion in 2014. Both services now have well over a billion users. The US competition watchdogs approved the takeovers of Instagram and WhatsApp at the time.

In the past there had been calls to remove Instagram and WhatsApp from Facebook. In recent years, the group has brought together the infrastructure behind the platform of its online network as well as Instagram and WhatsApp more closely. That would make a split technically more difficult.

Overall, the pressure on technology companies in the USA has been increasing significantly for weeks. Among other things, the US Department of Justice is investigating Google and the prosecution has filed a lawsuit against Amazon.

More: FTC sues Facebook


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