The US government has suffered a severe setback in trying to get Facebook broken up in court. A judge in Washington dismissed a related FTC lawsuit. The FTC has not proven that Facebook has a monopoly in the market for social networks, he argued in his decision published on Monday. However, he left the authority open to submit an updated complaint within 30 days. However, the judge completely dismissed a similar lawsuit from more than 40 states.
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. The states backed the allegations with their own lawsuit.
A key question now is how President Joe Biden’s administration intends to deal with the case – the lawsuit dates back to the time of 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. The lawsuit was initiated by Trump-appointed then FTC chief Joseph Simons and the two Democratic Party commissioners, while the two Republicans voted against.
The judge had harsh criticism for the agency’s lawyers. “The FTC lawsuit says almost nothing specific about how much power Facebook had and still has in a properly defined product market,” he wrote. “It is as if the agency wanted the court to simply give up the general belief that Facebook was a monopoly.” The legal concept of a monopoly position is precisely defined and relates to a clearly defined market.
Facebook’s market value rose to over a trillion dollars for the first time
Facebook had applied to the court in March to reject the FTC lawsuit – among other things because the authority had too vaguely outlined the market in which Facebook was active. After the judge’s decision became known, Facebook shares were up a good four percent – and for the first time exceeded the one trillion dollar mark (838 billion euros).
Facebook bought Instagram in 2012 for around a billion dollars and WhatsApp in 2014 for around 22 billion dollars in the end. Both services now have well over a billion users. The US competition watchdogs approved the takeovers of Instagram and WhatsApp at the time. The judge dismissed the state’s lawsuit because it had allowed too much time to pass since the acquisitions.
There had already been calls in the past to remove Instagram and WhatsApp from Facebook. In recent years, the group has brought the infrastructure behind the platform of its online network, as well as Instagram and WhatsApp, closer together. That would make a split technically more difficult.
After the judge’s decision, calls for stricter laws against the technology giants were immediately loud in the US Congress. In the House of Representatives, the head of the Legal Affairs Committee, Jerrold Nadler, and the chairman of the Cartel Subcommittee, Davon Cicilline, affirmed that, from their point of view, Facebook had a monopoly position. They referred to the laws on competition in the tech industry that the Democrats had launched a few days ago.