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Is Facebook a monopoly? Please define, says judge.

A federal court threw out two antitrust complaints against Facebook, but the case isn't quite closed.

June 28, 2021
File photo dated April 10, 2018 of Facebook CEO Mark Zuckerberg testifies before the Senate judiciary and commerce committees on Capitol Hill over social media data breach, in Washington, DC, USA. The Federal Trade Commission sued to break up Facebook on Wednesday, asking a federal court to force the sell-off of assets such as Instagram and WhatsApp as independent businesses.
File photo dated April 10, 2018 of Facebook CEO Mark Zuckerberg testifies before the Senate judiciary and commerce committees on Capitol Hill over social media data breach, in Washington, DC, USA. The Federal Trade Commission sued to break up Facebook on Wednesday, asking a federal court to force the sell-off of assets such as Instagram and WhatsApp as independent businesses.
Olivier Douliery/Abaca/Sipa USA (Sipa via AP Images)

It was never going to be easy to challenge the market power of Facebook, the world’s largest social network and 34th-largest company, by revenue—and on Monday, a US judge further complicated efforts by dismissing two legal complaints against it brought by attorneys general around the country. 

Judge James Boasberg of the DC Circuit Court sided with the company in its motion to dismiss two separate lawsuits filed by the Federal Trade Commission and a coalition of 48 states in December, ruling that the case was “legally insufficient” to prove that the company had a monopoly on social media—specifically, that it did not prove Facebook had “in excess of 60%” control of the social media market as alleged. 

“The FTC’s Complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market,” the ruling reads. “It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist.”

Boasberg did note that the evidence presented of Facebook’s monopoly might have worked for a more traditional industry, but “this case involves no ordinary or intuitive market.”

Boasberg’s dismissal of the complaint is not, however, a dismissal of the case itself.  The FTC has 30 days to amend its lawsuit, and an agency representative told reporters that it is “closely reviewing the opinion and assessing the best option forward.” 

Any additional action will be led by the new FTC chair, Lina Khan, a vocal critic of Big Tech who first came to prominence when she argued that antitrust laws focused on pricing were not enough to check the power of Amazon. 

But while the FTC has another shot at that case, the judge dismissed a separate lawsuit filed by the 48 states challenging Facebook’s acquisitions of Instagram and WhatsApp, saying that they had waited too long to file their case. He did note that this issue of timing did not exist for the FTC, which could choose to investigate any merger at any point at which it believes it has cause. 

Facebook—and its investors—have called the decision a victory. In the wake of the decision, the company’s stock price increased by 4.2%, pushing its market capitalization past $1 trillion for the first time in its history.

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