Antitrust lawsuit against FaceBook dismissed as legally insufficient

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One-liner: A federal judge on Monday dismissed antitrust lawsuits brought against Facebook by the Federal Trade Commission and a coalition of state attorneys general, dealing a significant blow to attempts by regulators to rein in tech giants.

Complaint dismissed: US District Judge James Boasberg ruled that the lawsuits were “legally insufficient” and didn’t provide enough evidence to prove that Facebook was a monopoly. The ruling dismisses the complaint but not the case, implying the FTC could refile another complaint.

  • “These allegations — which do not even provide an estimated actual figure or range for Facebook’s market share at any point over the past 10 years — ultimately fall short of plausibly establishing that Facebook holds market power” - Boasberg

Charting next steps: The FTC said in a statement that it is closely reviewing the opinion and assessing the best option forward. The agency has 30 days in which to file a new complaint.

States complaint dismissed: Boasberg closed that avenue for the states dismissing outright their separate complaint.

Stifling competition: The US govt and 48 states and districts sued Facebook in Dec 2020, accusing the tech giant of abusing its market power in social networking to crush smaller competitors and requesting remedies that could include a forced spinoff of Instagram and WhatsApp messaging services.

Systematic elimination: The FTC had alleged Facebook engaged in a systematic strategy, to eliminate its competition, including by purchasing smaller up-and-coming rivals like Instagram in 2012 and WhatsApp in 2014.

Facebook’s response: In an e-mail statement Facebook, said “We are pleased that today’s decisions recognize the defects in the govt complaints filed against Facebook. 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.”

Foundation for stronger defense: Richard Hamilton Jr., a former prosecutor, and Justice Dept antitrust attorney, said the judge, by finding FTC’s arguments insufficient, gave Facebook schematics for a better defense for future trials.

Need for reform: “Courts really have a hard time with that market definition for some reason. It’s Exhibit A for why we need the laws changed.”- Alex Harman, Alex Harman, competition policy advocate for Public Citizen

Well-defined categories: Companies like Facebook and Google, don’t fall into neat categories in terms of market, say like crude oil or ingots, making it difficult to regulate. This is a statement echoed by Rebecca Allensworth, a law professor.

Brighter horizon: An ambitious package of legislation to overhaul the antitrust laws, which could point toward breaking up Facebook as well as Google, Amazon, and Apple, was approved by the House Judiciary Committee last week and sent to the full US House.

In limbo: Last Oct the Trump Justice Department, joined by about a dozen states, brought a landmark antitrust suit against Google, accusing the company of using its dominance in online search to stifle competition and innovation.

  • As it stands, the case isn’t scheduled to go to trial in federal court for nearly three years

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